The U.S. Small Business Administration has released a one-page form to simplify the process of applying for forgiveness of loans for the Payment Check Protection Program, along with revised and updated forms to meet the requirements of the latest stimulus legislation.
The COVID-19 relief package that Congress passed last month revived the PPP with $ 284 billion in financing for small businesses seeking forgivable loans to help them deal with the economic consequences of the coronavirus pandemic. It included a requirement that the SBA issue simplified forms within 24 days after the legislation was enacted into law to simplify the forgiveness process, along with conditions designed to encourage more loans from community banks, especially for minority-owned companies that had difficulty obtaining loans last year.
“The Small Business Administration has met the requirement to issue the one-page PPP loan forgiveness form within 24 days after the date of promulgation of the Consolidated Appropriations Act 2021,” wrote Ed Zollars, partner at Thomas & Zollars, CPA, in your Current federal tax developments blog for Kaplan Financial Education. “The agency also published additional updated forms.”
The revised forms include:
- Form 3508S: A one-page forgiveness form for PPP loans up to $ 150,000 along with instructions.
- Form 3508-EZ: A simpler forgiveness request form for borrowers who meet specific safe harbor conditions.
- Form 3508: The full PPP loan forgiveness application for those who are not eligible to use any of the other forms above.
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The SBA also issued Form 3508D where borrowers can disclose control interests in the business to other companies and if any government officials are involved in the business.
The Form 3508S one-page forgiveness form will be especially useful for small businesses that have borrowed less than $ 150,000 from PPP.
“Form 3508S reduces the amount of information and documentation provided to the lender at the time the borrower asks for the loan to be forgiven,” wrote Justin Elanjian, partner responsible for the PPP and ERC services at Aprio, one of the top 100 companies, in a article on the company’s website. “However, the borrower must accurately calculate the amount of the loan forgiveness requested and verify the payments of eligible costs included in it. In addition, although ‘no documentation is required to be presented to the lender at the time of the loan forgiveness request’, the borrower must keep all employment records / payroll documentation in his files for four years and all other documentation for three years after the loan is canceled, the application is submitted to the lender and allows authorized SBA representatives – including representatives from its Office of the Inspector General – to access these files upon request. “