On December 27, 2020, the Consolidated Appropriation Act was signed into law which created significant changes and an extension to the Small Business Administration’s Paycheck Protection Program. On January 20, 2021, the Small Business Administration released an updated Form 3508S PPP Loan Forgiveness Application to comply with these changes.
What businesses are eligible for this new forgiveness form?
Businesses that received loans of $150,000 or less are eligible to use this form. Certain members of affiliated or controlled groups may not be eligible. Please consult your Mitchell Wiggins advisors for further information.
What are the benefits of using this new form?
This form greatly simplifies the forgiveness process for borrowers. Borrowers with loans under $50,000 are not required to perform detailed calculations of full-time employee (FTE) counts and reductions. Borrowers with loans between $50,000 and $150,000 will need to consider FTE reductions, but not be required to submit support with their forgiveness application. Borrowers are not required to provided detailed listings of other non-payroll eligible expenses or supporting documentation for the figures or calculations that are presented on the forgiveness application.
Borrowers are only required to report:
- Loan and borrower identifying information
- Numbers of employees at application and at forgiveness
- The amount of loan proceeds spend on payroll costs and the period over which they were spent
- The amount of the loan they would like to have forgiven
- Certifications that the borrower has complied with all provision and that the application is true and correct
How does a business report their Economic Injury Disaster Loan (EIDL) grant on this form?
The recently passed stimulus legislation eliminated the requirement to reduce PPP forgiveness for any EIDL grant received. Therefore there is no longer a need to report the amount of EIDL grant received on the PPP Forgiveness application.
Does this form provide for automatic forgiveness?
There is no method for automatic forgiveness. All PPP loans will require some method of reporting to your lender and the SBA. This application provides for simplified forgiveness.
Can I use this form and apply for the newly expanded Employer Retention Credit?
Yes, but borrowers should take care to not report wages used for other tax credits or grant programs (RebuildVA, Provider Relief Fund, etc.) on their PPP application as well.
How can Mitchell Wiggins help?
Our PPP Task Force is actively assisting clients in eligibility for PPP2 loans, PPP1 loan forgiveness and maximizing tax incentives between PPP forgiveness and employer payroll tax incentives. Please reach out to your Mitchell Wiggins representative if you would like assistance or have questions.