Whatever the decision, it goes directly to the SBA, requiring no action on your part. For example, if you only rehire three of your four employees, your maximum forgiveness becomes 75% of the total loan amount. The right product depends on who you are and what you need – but regardless, you want the best. You need to bring your employee headcount back to pre-pandemic levels to receive full loan forgiveness. There was a problem connecting. In December, Congress passed another stimulus package that re-ups the PPP, making a few changes in the process. Many of our clients have participated in this program. If this occurs, the lender must notify the borrower of the date the first payment is due. If you received your PPP loan through Wells Fargo, you’ll need to submit your forgiveness request through us as well. If your PPP period is 24 weeks, the forgiveness amount is reduced by $1,500 ($250 additional monthly reduction ✕ 6-month PPP period). Important note for customers who had already begun their forgiveness application prior to the simplified process being available in the portal: Action is required on your part in order to transition to the new, simpler forgiveness process and forms. How PPP forgiveness guidelines work 1. If an eligible PPP borrower fails to apply for forgiveness within 10 months after the last day of the covered period or if the SBA determines that the loan is not eligible for forgiveness (in whole or in part), the PPP loan is no longer deferred the PPP borrower must begin paying principal and interest. TD is pleased to announce that as of March 5 th, the PPP loan forgiveness portal has reopened for loans up to $150,000.We are working hard to ensure that forgiveness applications for all loan amounts can be accepted in the coming weeks. Get clear, concise answers to common business and software questions. The SBA will then have 90 days to evaluate eligibility for loan forgiveness in accordance with PPP regulations and guidance issued by the  SBA through the date of application. Please note: This blog is current to the date of its publication, Tuesday, July 7. So don’t trust experts who say don’t worry about getting the We’ve done the expert research, so you don’t have to. PPP2 loans are limited to $2 million, and some businesses qualify for an additional forgivable loan, called a second draw. Determine loan forgiveness reduction based on a reduction in salaries or wages of more than 25%: For employees who earned $100,000 or less in 2019 (or were not employed by the borrower in 2019), the borrower’s loan forgiveness will be reduced for each employee whose average pay Book Nina Payroll: Documentation verifying the eligible cash compensation and non-cash benefit payments from the Covered Period or the Alternative Payroll Covered Period consisting of each of the following: a. In order to receive forgiveness for the entire PPP loan, however, the payroll portion must be at least 60% of the loan. Expenses eligible for forgiveness are those that are incurred over the 8 to 24 week period, starting from the day you receive your PPP loan from your lender. G-Squared Partners can help. Get trustworthy advice to help your business grow. It’s best to talk to a tax professional when applying for SBA PPP loans and forgiveness. When COVID hit, there was a huge demand for dogs, which led this small business owner to go virtual with her dog breeding and training business to boost sales. Loans booked prior to June 5th have a 2-year term, unless the customer and lender agree to adjust the term to five years. Especially my fellow #DCA Students and Alumni?! The Author and/or The Motley Fool may have an interest in companies mentioned. Here are three ways to send employees their Forms W-2. Are you paying more in taxes than you need to? There was an error signing up. The 4 Disciplines of Execution covers concepts and actionable tips on how to navigate through your daily tasks while still accomplishing your long-term goals. The Motley Fool has a Disclosure Policy. Borrowers applying for loan forgiveness under the Small Business Administration’s (“SBA”) Paycheck Protection Program (“PPP”) should familiarize themselves with the SBA guidance regarding the loan forgiveness review process. We will also notify you by email. When navigating the processes and calculations related to loan forgiveness (Phases 2 and 3 below), you may be faced with … IRS Forms 940 and 941 must be filled out to ensure you're paying employment taxes. If the amount is below 60%, the … Let our Student Loan Advisers at SPC assist you in identifying the best types of government programs available for you that can provide payment relief and possible loan forgiveness. All rights reserved. Safety requirements prevent you from returning to pre-pandemic operating levels. ]PPP forgiveness calculator - Long form 3580 (revised on 6/17/20 and again on 6/19/19 to correct formula error) - Excel. Wherever you got... 3. Looking for a different set of features or lower price point? Find out what you need to look for in an applicant tracking system. If you’re reading this, congratulations: You’ve made it to the point where you need to start thinking about how to get your Paycheck Protection Program (PPP) loan forgiven. Some businesses have already received their PPP loan and for some the funding is on its way. Restaurants have been hit hard by the coronavirus pandemic. Borrowers receive full loan forgiveness if they spend at least 60 percent of their PPP second draw loan on payroll costs over a time period of their choosing between 8 weeks and 24 weeks. Simplifies the forgiveness application process for smaller loans up to $150,000 while increasing SBA’s ability to audit and review forgiven loans. As formal … Your headcount isn’t affected by employees who ask for and are granted a reduction in working hours. Only 40% of your PPP loan can be used for expenses other than payroll for certain business structures. Though you can patch up any small error you let slip through, it’s best to get your application done correctly the first time. On December 27, 2020, the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act was passed, and includes simplified forgiveness for PPP loans of $150,000 or less. BBVA USA will not pay any agent or other third party a fee or other compensation for referring an applicant or assisting an applicant in preparing an application. When I first started to make online courses, I knew it was the right … We recommend customers with loans $150,000 or less wait until the simplified application is available in the next few weeks. Here’s what you have to look forward to once you’re ready to apply for forgiveness. Please do not submit your PPP Loan forgiveness application via the mail. For security tips and helpful links, please visit our, home.treasury.gov/policy-issues/cares/assistance-for-small-businesses, www.sba.gov/funding-programs/loans/coronavirus-relief-options/paycheck-protection-program, One central place to submit all required information, enter eligible payroll and non-payroll costs, and upload all required supporting forgiveness documentation, A Borrower Knowledge Center with access to educational materials, FAQs and search features, Secure messaging with experts to help you with your questions and concerns, An intuitive forgiveness dashboard with submission details and current status, Access to forgiveness calculations and process milestones, Convenient electronic signing of your forgiveness application. They offer a variety of plans ranging from free, for simple returns, to business, for corporations. Please note that submitting a PPP application does not guarantee funding or forgiveness of the loan by the U.S. Small Business Administration. ©2019-2021 The Motley Fool. All loans are due in five years, if not forgiven. Ruling 2020-27 directing that a taxpayer who received a PPP loan and paid allowable expenses with the loan proceeds will not be able to deduct these expenses. They might reach out and ask for additional information. If the borrower does not apply for loan forgiveness within 10 months after the last day of the Covered Period, or if the SBA determines that the loan is not eligible for forgiveness (in whole or in part), the PPP loan is no longer deferred and the borrower must begin paying principal and interest. Borrowers should consult their own tax, legal and accounting advisors before engaging in any transaction. Tax experts, tax software companies, and small business owners might be feeling whiplash with all of the PPP rule changes. Once the application is submitted for forgiveness, the lender has 60 days to review the application and documentation submitted by the customer, and the SBA has another 90 days to review the lender’s decision. Billions in Funding for CARES Act. Use our PPP Loan Forgiveness calculator to estimate how much of your loan may be forgiven. For example, the December COVID-19 stimulus package added new forgivable expenses to its list of non-payroll costs, potentially increasing your forgiveness amount. 3508EZ I. NSTRUCTIONS FOR . Businesses that received a PPP loan in 2020 must apply for forgiveness within 10 months of using the funds. Instead of declaring an 8-week or 24-week covered period borrowers will choose a covered period end date. For security tips and helpful links, please visit our Security Center. Compile your documentation: Payroll (provide documentation for all payroll periods that overlapped with the Covered... 3. A shorter forgiveness application is on the way for most PPP loans. PPP Loan 2. If you received a PPP loan in 2020, you should have received a letter with the information you need to log in, which included your SBA loan number and BBVA loan number. The BlueVine Business Checking account is an innovative small business bank account that could be a great choice for today's small businesses. We may receive compensation from some partners and advertisers whose products appear here. For S-Corporations, the PPP loan forgiveness is treated as tax-exempt and increases the shareholder's basis in the S-Corporation stock. In order to minimize disruption to our customers, we schedule maintenance at times during which these systems are least likely to be used. That’s how we make money. As with several government programs during the COVID-19 pandemic, rules and guidance on these programs are always evolving. Quarterly federal tax return Form 941 Thanks to a simplified forgiveness application for... 2. However, you’re still required to retain employment records for four years and other related documents for three years. On December 27, 2020, the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act was passed, and includes simplified forgiveness for PPP loans of $150,000 or less, and is now included in the forgiveness portal. Here are some of the most common questions we are hearing from companies: How should we account for the forgiveness of our PPP Loan? Use our research library below to get actionable, first-hand advice. To maximize forgiveness, at least 60% of the loan must be used for payroll costs, plus health and retirement benefit costs. Trying to decide between two popular software options? Financial circumstances led you to reduce his pay to $3,500 per month, a 30% decrease. Your headcount declines because of employees who are justifiably fired or voluntarily resign. Does your company want to ensure you receive full forgiveness of your PPP loan? Check with your lender for more specific PPP repayment terms. If you don’t like the answer — maybe you only got partial forgiveness when you expected 100% — you have 30 days from receiving your lender’s decision to request the SBA review your case again. Each phase of the PPP loan process brings new challenges. Our comprehensive guides serve as an introduction to basic concepts that you can incorporate into your larger business strategy. A Form W-9 gathers information about a vendor for a business to prepare contractor tax forms. Under the Paycheck Protection Program (PPP) created by the CARES Act, loans may be forgiven if borrowers use the proceeds to maintain their payrolls and pay other specified expenses. When the global economy halted in early 2020 due to the COVID-19 pandemic, the U.S. government stood up the PPP so small businesses could keep the lights on and employees on the payroll. Follow me on Twitter . We appreciate your ongoing partnership with BBVA. For loans between $50,000 and $150,000, recipients would have to request forgiveness with “a simplified one-page application form that does not require the submission of any documentation.” This has not been passed by the Senate, though, so currently there’s no automatic PPP forgiveness no matter how small the loan is. Compensation may impact where products are placed on our site, but editorial opinions, scores, and reviews are independent from the advertising side of The Blueprint and our objectivity is an integral part of who we are. Welcome to the Paycheck Protection Program Loan Forgiveness website of Huntington Bank. Please verify that the email is valid and try again. The word “eligible” creates some mess. The Form W-2 details employee earnings and is used when they file their individual income taxes. If you reduced your number of employees or their wages during the 24-week period, your loan forgiveness amount will be reduced. Our team will work with you and your bank to: Calculate eligible payroll costs for 24-week Covered Period after receipt of funds Our priority at The Blueprint is helping businesses find the best solutions to improve their bottom lines and make owners smarter, happier, and richer. 1. The Small Business Administration (SBA) has not yet released the final rule on specific requirements and how the forgiveness application will work, … Once the Wells Fargo PPP loan forgiveness online application becomes available, you’ll see a link in Wells Fargo Business Online®, or the Commercial Electronic Office® (CEO®). However, you may make a payment on your PPP loan at any time. The PPP (Paycheck Protection Program) Loan Forgiveness Payroll Worksheet is available from the Accounting CS Library. Gather accounting records. No specific action is needed to opt in to the chosen period. Or you can opt for the SBA’s simplified FTE method by counting any part-time employee, regardless of hours worked, at 0.5 FTE. *BBVA USA and its affiliates do not provide tax, legal or accounting advice. Spotlight on Women-Owned Businesses: Sirena Rana, Founder of Trails Inspire, LLC, Spotlight on Women-Owned Business: Ashley Mason, Founder and CEO of Dash of Social, The 4 Disciplines of Execution: The Blueprint’s Book of the Month for February 2021, New Data Reveals the Devastating Toll the Pandemic Has Had on Restaurants, A Small Business Guide to the Second COVID Relief Package. PPP Loan Forgiveness Q&A . H&R Block recognized that people are interested in preparing their taxes themselves, so they offer both a downloadable application and an online tax preparation program easy enough for anyone to use. Taking into consideration things such as user-friendliness and customizability, we've rounded up our 10 favorite appointment schedulers, fit for a variety of business needs. The Small Business Administration (SBA) deployed PPP loans equal to 2.5 times a company’s allowable monthly payroll costs, up to $10 million. BBVA will continue to monitor conditions and look for ways to improve our service while protecting customers and team members alike. This webinar is for nonprofit financial leaders who have received a Paycheck Protection Program (PPP) Every dollar makes a difference, and you can save more of them by taking ALL the tax deductions available to your business. Millions were provided to qualifying businesses and nonprofits in the form of forgivable loans. The SBA’s final decision is, well, final. This is not necessarily the date on which you signed your loan agreement. Data entry for the PPP loan forgiveness depends on whether or not the loan is included in book income. Enhances borrower flexibility by allowing borrowers to select their loan forgiveness covered period between 8 weeks and 24 weeks. PPP allows for full forgiveness when at least 60% of the PPP funds go toward eligible payroll costs (it had previously been 75%). Sirena Rana, founder of Trail Inspire, made her passion a reality and started a company. Learn how the latest news and information from around the world can impact you and your business. Please refer to SBA’s FTE Reduction Safe Harbor 1, which addresses businesses unable to operate during the Covered Period at the same level as before February 15, 2020, due to compliance with requirements established or guidance issued between March 1, 2020 and December 31, 2020, by the Secretary of Health and Human Services, the Director of the Centers for Disease Control and Prevention, or the Occupational Safety and Health Administration related to the maintenance of standards for sanitation, social distancing, or any other worker or customer safety requirement related to COVID-19. You’ll be notified of the loan forgiveness amount as your case moves to the SBA. You need to account for where and when you spent each dollar in the forgiveness application. Because the PPP loan forgiveness process can be tedious, members of Congress have proposed legislation that would allow for a much simpler process of streamlined forgiveness for loans under a certain amount. Kurt Oestriecher, CPA discusses Form 3508S on PPP loan forgiveness. AccountEdge Pro has all the accounting features a growing business needs, combining the reliability of a desktop application with the flexibility of a mobile app for those needing on-the-go access. 1A. Eliminates the requirement that EIDL advances be subtracted from PPP forgiveness. In the market for tax software for your small business? Some of the information included names, addresses, exact loan amounts and who their PPP lenders were. A free tool that helps small business owners navigate the complexity of federal relief to get access to help when they need it most during the COVID-19 pandemic. A. PPLICATION . Please try again. Your forgiveness amount is reduced by $250 multiplied by your PPP loan period. For loans over $150,000, the updates will provide expanded categories of forgivable payroll and non-payroll items and increased flexibility to maximize forgiveness. Congress is acting today to allow PPP borrowers to deduct PPP expenses, and not have to include Simple enough, right? President Biden’s proposal for $10,000 in student loan forgiveness will qualify for tax-free treatment. Compare your FTE during the loan period to the average FTE during one of the following periods. Wrong. If you want to appeal your lender’s PPP forgiveness decision, talk to a CPA for guidance. The quality of the financing you receive can affect the success of your business. If used appropriately, forgiveness should be granted. FTE reductions due to one of those 6 Exceptions will not reduce borrower’s loan forgiveness eligibility. The relief bill further clarified Congress’s stance on deducting expenses covered by PPP funds. The SBA has yet to update its applications, so you’ll need to wait until the application reflects that change. Learn how using our software-specific feature walk-throughs and how tos. Learn how real businesses are staying relevant and profitable (and are even growing) in a world that faces new challenges every day. On December 1, the Small Business Administration released public data about Paycheck Protection borrowers. Interested applicants should apply only through BBVA's PPP portal and not through any third-party sites. Our commitment to you is complete honesty: we will never allow advertisers to influence our opinion of products that appear on this site. Two recent examples are set forth below. PPP Forgiveness Application Guidelines. What’s on your mind? Our Paycheck Protection Program loan forgiveness portal is now open for PPP loans opened in 2020, and reflects significant improvements as a result of the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act. Find the TurboTax version that's best for you with their easy-to-use questionnaire. Apply for forgiveness through your loan provider. See how your choices perform when evaluated side-by-side. If the loan was disbursed June 5th or after the borrower will only have 24 weeks (168 days) period. PPP loan forgiveness is determined based on how the small-business client spent the loan proceeds. A taxpayer received PPP loan funds of $1 million in 2020 and plans to submit an application for forgiveness in January 2021 expecting to get $800,000 forgiven. F. ORGIVENESS . However, to avoid having to start loan payments, you will want to apply for forgiveness within 10 months of the end of your covered period. Please refer to the SBA’s 6 FTE Reduction Exceptions which include instances in which Employees voluntarily resigned. Directly refuting the IRS’s and Treasury Department's guidance, legislators say you may fully deduct any business expense you paid with a PPP loan. Having updated accounting records is crucial to a smooth PPP forgiveness process. PPP forgiveness rules have changed a few times in the past nine months, so my best advice is to wait for lenders and the SBA to catch up with the newest legislation before applying for forgiveness. PPP 2. PPP Loan Forgiveness Calculator Last updated February 22, 2021 . You should have also received an email sent to the email address we have on file for your business. Public companies have begun to make disclosures regarding receipt of loan proceeds from the Paycheck Protection Program established by the CARES Act. As a reminder, you will be able to request forgiveness up until your loan maturity date. Additional Treasury Guidelines on PPP Loan Forgiveness released on May 22, 2020. Looking for the best tips, tricks, and guides to help you accelerate your business? If you have any questions, please contact your banker or your local branch. Did you know I actually created something really special for course creators? If there’s any year to hire a tax professional, it’s this year. Our experts take you through step-by-step processes, providing tips and tricks to help you avoid common pitfalls along the way. To continue to use our online services, you must upgrade to a current version of Google ChromeTM, Mozilla Firefox® or Microsoft Internet Explorer®. PPP Loan Forgiveness 1. Should the SBA or your lender inquire about the use of PPP funds, you’ll want your records in order. Editorial content from The Blueprint is separate from The Motley Fool editorial content and is created by a different analyst team. You can visit the US Treasury’s website home.treasury.gov/policy-issues/cares/assistance-for-small-businesses, or the SBA’s website at www.sba.gov/funding-programs/loans/coronavirus-relief-options/paycheck-protection-program. CoConstruct is easy-to-use yet feature-packed software for home builders and remodelers. 3245-0407. All PPP loans booked June 5th and later have a 5-year term. The late December stimulus package, signed by President Donald Trump, streamlines the forgiveness process for loans of $150,000 or less. We may receive compensation from partners and advertisers whose products appear here. If you did not receive this letter please contact 866-996-6240. If you wait too long, loan payments will start coming due at a 1% interest rate. The December stimulus package created a simplified path for forgiveness for PPP loans of $150,000 or less. PPP Update. Click on the Apply Now button below to start your forgiveness application for PPP loans originated in 2020.