Paycheck Protection Program (PPP)
Forgiveness FAQs

1st Draw Forgiveness FAQs

What is the deadline to apply for loan forgiveness?
The SBA has not set a specific application deadline. Borrowers may apply for forgiveness any time before the maturity date of the loan

Can I still apply for and receive forgiveness of my first PPP loan?
Yes. Borrowers can still apply for forgiveness for loans issued in 2020 even though the SBA is providing another round of funding.

Are payroll service provider costs eligible for forgiveness?
Yes. New guidance states that accounting and other human resources costs are included in covered operations expenditures.

If I receive a first and second draw, and together they are under $150,000, can I use one certification to apply for forgiveness?
First and second draw loans are considered separate loans, so forgiveness will be applied for separately. However, forgiveness can be applied for a the same point in time.

What specific costs are included in supplier costs eligible for forgiveness?
Supplier costs include expenditures to a supplier pursuant to a contract, purchase order, or order for goods in effect prior to taking out the loan that are essential to the recipient’s operations at the time at which the expenditure was made. Supplier costs of perishable goods can be made before or during the life of the loan.

What costs are included in group benefits costs eligible for forgiveness?
Group benefits costs include employer paid group benefits for health, life, disability, dental and vision insurance.

Are worker’s protection costs from March of 2020 eligible for forgiveness?
Costs included on your forgiveness application must have been paid or incurred during the loan’s Covered Period.

Do worker’s protection costs include costs associated with allowing employees to work remotely? (such as costs for VPN set-up, video conferencing subscriptions, etc.)
Our interpretation of the SBA’s guidance is that these costs would be considered PPE costs and are eligible for forgiveness.

If I received a PPP loan in 2020, am I eligible to include costs for the new cost categories eligible for forgiveness in my forgiveness request?
Yes. All new requirements that resulted from the new legislation are applied retroactively to all loans issued in 2020, as long as forgiveness has not already been received.

Are premiums paid for the owner’s health benefits eligible for forgiveness?
Benefits costs for owners are not eligible for forgiveness, unless indirectly part of a general employee benefit plan.

Are employee compensation caps of an annualized salary of $100,000 still applied to forgiveness amount calculations?
Yes. Only compensation up to an annualized salary of $100,000 should be included in the forgiveness calculation. Benefits costs are not included in the $100,000 threshold.

If we did not include owner compensation in our original loan calculation, can we request forgiveness for owner compensation, or is it limited to payroll used to calculate the loan amount?
Borrowers may use the PPP funds on any cost categories eligible for forgiveness. In order to achieve full forgiveness, at least 60% of the loan must be used on eligible payroll costs.

Is forgiveness still based on a minimum expenditure of 60% of the funds on payroll?
Yes. The 60% payroll requirement in order to achieve full forgiveness still applies to existing, new and second draw PPP loans.

What is the purpose of the revised PPP loan Form 3508S and when should borrowers use Form 3508S?
The revised PPP loan Form 3508S provides a streamlined forgiveness application for all PPP loans of $150,000 or less, not requiring calculations to be shown, and less supporting documentation. All borrowers with loans $150,000 or less should use this form only going forward

Are borrowers eligible to apply for forgiveness using the streamlined application for loan less than $150,000 even if their first and second draw loans together exceed $150,000?
Yes. First and second draw loans are considered separate loans, so forgiveness will be applied for separately.

Is the new simplified application different than the EZ form? Will the EZ form still be available for use? The new simplified application is only for borrowers who received loans less than $150,000. The EZ form will still be available for borrowers to apply for forgiveness, as long as the requirements to use the EZ form are met.

To receive forgiveness for supplier costs, does a written contract need to be provided showing the agreement with the supplier?
The SBA has not provided guidance on the specific documentation required to support these expenditures.

What is required to be in the 1-page certification to apply using the streamlined application for loans under $150,000?

A borrower shall receive forgiveness if a borrower signs and submits to the lender a certification that is not more than one-page in length including:

  • A description of the number of employees that the borrower was able to retain because of the covered loan
  • The estimated total amount of the loan spent on payroll costs
  • The total loan amount

The borrower must also attest that the borrower accurately provided the required certification and complied with program requirements.

Are borrowers required to submit supporting documentation with the Form 3508S streamlined application? Borrowers are not required to submit any supporting documentation with the application, however, must maintain documents that could be requested during an audit or SBA loan review. Borrowers should be advised to prepare this documentation and have it ready, enabling fast response upon SBA inquiry.

Is PPP forgiveness treated as taxable income?
Forgiveness of PPP loans are not to be included as taxable income on a borrower’s tax returns.

How do the new forgiveness requirements affect non-profit organizations?
The rules are the same for non-profit organizations as for for-profit organizations.

Will forgiveness be given to second draw recipients?
Borrowers may request forgiveness for both first and second draw PPP loans.

Even with additional cost categories eligible for forgiveness, the loan amount does not change. How is it beneficial to add in new eligible costs incurred?
New cost categories allow businesses to use the funds on other expenditures that resulted from the pandemic in case the borrower was unable to spend the entirety of the loan on payroll.

Will the new requirements affect applications that have already been submitted to the Bank for forgiveness?
Borrowers may adjust their applications to reflect the new program requirements as long as the application has not been submitted to the SBA and forgiveness has not been received.

A business already submitted their forgiveness application for a loan under $150,000, will the applicant be required to re-apply using the new streamlined application?
No. If an application was already submitted to the Bank, the applicant will not be required to resubmit a new application. However, if the application has not been submitted to the SBA and forgiveness has not been received, the borrower can resubmit their application to expedite the review process.

Can businesses include expenditures that fall under the new cost categories in their forgiveness request for a loan that was issued in 2020?
Yes. New program requirements apply to new, second draw and current PPP loans.

What is the purpose of the revised PPP loan Form 3508D?
Form 3508D should be completed for all PPP1 first draw loans received prior to 12/27/20 with applicable “covered individual” owners. Covered individuals are primary government officials who hold a “controlling interest,” or more than 20%, in the borrowing entity.

When do borrowers need to complete Form 3508D?
If a borrower already submitted a forgiveness application, the form needs to be completed and sent to the SBA no later than 1/26/20 via email. If forgiveness has not been processed, this form should be submitted along with forgiveness documentation within 30 days via the SBA platform.

Are loans under a certain amount threshold exempt from reductions to the loan forgiveness amount? Only loans of $50,000 or less are exempt from any reductions to the loan forgiveness amount. A borrower with a loan greater than $50,000 and up to $150,000 must comply with the requirements under PPP, including calculating any reduction in forgiveness amounts based on reductions in FTEs or employee salary or wages. It should be noted that reduction is waived if the borrower certifies to being impacted by government controls related to the pandemic.

2nd Draw Forgiveness FAQs

What is the deadline to apply for loan forgiveness?
The SBA has not set a specific application deadline. Borrowers may apply for forgiveness any time before the maturity date of the loan

Can I still apply for and receive forgiveness of my first PPP loan?
Yes. Borrowers can still apply for forgiveness for loans issued in 2020 even though the SBA is providing another round of funding.

Are payroll service provider costs eligible for forgiveness?
Yes. New guidance states that accounting and other human resources costs are included in covered operations expenditures.

If I receive a first and second draw, and together they are under $150,000, can I use one certification to apply for forgiveness?
First and second draw loans are considered separate loans, so forgiveness will be applied for separately. However, forgiveness can be applied for a the same point in time.

What specific costs are included in supplier costs eligible for forgiveness?
Supplier costs include expenditures to a supplier pursuant to a contract, purchase order, or order for goods in effect prior to taking out the loan that are essential to the recipient’s operations at the time at which the expenditure was made. Supplier costs of perishable goods can be made before or during the life of the loan.

What costs are included in group benefits costs eligible for forgiveness?
Group benefits costs include employer paid group benefits for health, life, disability, dental and vision insurance.

Are worker’s protection costs from March of 2020 eligible for forgiveness?
Costs included on your forgiveness application must have been paid or incurred during the loan’s Covered Period.

Do worker’s protection costs include costs associated with allowing employees to work remotely? (such as costs for VPN set-up, video conferencing subscriptions, etc.)
Our interpretation of the SBA’s guidance is that these costs would be considered PPE costs and are eligible for forgiveness.

If I received a PPP loan in 2020, am I eligible to include costs for the new cost categories eligible for forgiveness in my forgiveness request?
Yes. All new requirements that resulted from the new legislation are applied retroactively to all loans issued in 2020, as long as forgiveness has not already been received.

Are premiums paid for the owner’s health benefits eligible for forgiveness?
Benefits costs for owners are not eligible for forgiveness, unless indirectly part of a general employee benefit plan.

Are employee compensation caps of an annualized salary of $100,000 still applied to forgiveness amount calculations?
Yes. Only compensation up to an annualized salary of $100,000 should be included in the forgiveness calculation. Benefits costs are not included in the $100,000 threshold.

If we did not include owner compensation in our original loan calculation, can we request forgiveness for owner compensation, or is it limited to payroll used to calculate the loan amount?
Borrowers may use the PPP funds on any cost categories eligible for forgiveness. In order to achieve full forgiveness, at least 60% of the loan must be used on eligible payroll costs.

Is forgiveness still based on a minimum expenditure of 60% of the funds on payroll?
Yes. The 60% payroll requirement in order to achieve full forgiveness still applies to existing, new and second draw PPP loans.

What is the purpose of the revised PPP loan Form 3508S and when should borrowers use Form 3508S?
The revised PPP loan Form 3508S provides a streamlined forgiveness application for all PPP loans of $150,000 or less, not requiring calculations to be shown, and less supporting documentation. All borrowers with loans $150,000 or less should use this form only going forward

Are borrowers eligible to apply for forgiveness using the streamlined application for loan less than $150,000 even if their first and second draw loans together exceed $150,000?
Yes. First and second draw loans are considered separate loans, so forgiveness will be applied for separately.

Is the new simplified application different than the EZ form? Will the EZ form still be available for use? The new simplified application is only for borrowers who received loans less than $150,000. The EZ form will still be available for borrowers to apply for forgiveness, as long as the requirements to use the EZ form are met.

To receive forgiveness for supplier costs, does a written contract need to be provided showing the agreement with the supplier?
The SBA has not provided guidance on the specific documentation required to support these expenditures.

What is required to be in the 1-page certification to apply using the streamlined application for loans under $150,000?

A borrower shall receive forgiveness if a borrower signs and submits to the lender a certification that is not more than one-page in length including:

  • A description of the number of employees that the borrower was able to retain because of the covered loan
  • The estimated total amount of the loan spent on payroll costs
  • The total loan amount

The borrower must also attest that the borrower accurately provided the required certification and complied with program requirements.

Are borrowers required to submit supporting documentation with the Form 3508S streamlined application? Borrowers are not required to submit any supporting documentation with the application, however, must maintain documents that could be requested during an audit or SBA loan review. Borrowers should be advised to prepare this documentation and have it ready, enabling fast response upon SBA inquiry.

Is PPP forgiveness treated as taxable income?
Forgiveness of PPP loans are not to be included as taxable income on a borrower’s tax returns.

How do the new forgiveness requirements affect non-profit organizations?
The rules are the same for non-profit organizations as for for-profit organizations.

Will forgiveness be given to second draw recipients?
Borrowers may request forgiveness for both first and second draw PPP loans.

Even with additional cost categories eligible for forgiveness, the loan amount does not change. How is it beneficial to add in new eligible costs incurred?
New cost categories allow businesses to use the funds on other expenditures that resulted from the pandemic in case the borrower was unable to spend the entirety of the loan on payroll.

Will the new requirements affect applications that have already been submitted to the Bank for forgiveness?
Borrowers may adjust their applications to reflect the new program requirements as long as the application has not been submitted to the SBA and forgiveness has not been received.

A business already submitted their forgiveness application for a loan under $150,000, will the applicant be required to re-apply using the new streamlined application?
No. If an application was already submitted to the Bank, the applicant will not be required to resubmit a new application. However, if the application has not been submitted to the SBA and forgiveness has not been received, the borrower can resubmit their application to expedite the review process.

Can businesses include expenditures that fall under the new cost categories in their forgiveness request for a loan that was issued in 2020?
Yes. New program requirements apply to new, second draw and current PPP loans.

What is the purpose of the revised PPP loan Form 3508D?
Form 3508D should be completed for all PPP1 first draw loans received prior to 12/27/20 with applicable “covered individual” owners. Covered individuals are primary government officials who hold a “controlling interest,” or more than 20%, in the borrowing entity.

When do borrowers need to complete Form 3508D?
If a borrower already submitted a forgiveness application, the form needs to be completed and sent to the SBA no later than 1/26/20 via email. If forgiveness has not been processed, this form should be submitted along with forgiveness documentation within 30 days via the SBA platform.

Are loans under a certain amount threshold exempt from reductions to the loan forgiveness amount? Only loans of $50,000 or less are exempt from any reductions to the loan forgiveness amount. A borrower with a loan greater than $50,000 and up to $150,000 must comply with the requirements under PPP, including calculating any reduction in forgiveness amounts based on reductions in FTEs or employee salary or wages. It should be noted that reduction is waived if the borrower certifies to being impacted by government controls related to the pandemic.