Disclaimer: Ultimately if is your responsibility as the borrower to qualify for forgiveness. This blog and calculator is for information purposes only and not intended to replace your own due diligence for accuracy.

Not sure what the PPP is? Read this first.

Want to know how to use, track and record? Read this first.

If you want forgiveness on the loan you are in the right place.

Good news. They figured out that the first application was confusing AF for most simple businesses. So they issued a new EZ form that should make things fly by. They estimate it taking something like 10 minutes to complete. I would agree with that UNLESS you have employees. The more employees, the more data, etc.

If you don’t qualify based on the below information, this blog is for you instead.

Who gets to use this form?

Per the instructions, you must be able to check “yes” on ONLY 1 of the following:

Do you file a Schedule C and have no employees?
You have employees but no salaries or hourly wages were reduced by any employee by more than 25% during the covered period and kept the same FTE headcount (excluding those fired, quit or voluntarily reduced).
You have employees no salaries or hourly wages were reduced by any employee by more than 25% during the covered period AND the borrower was unable to operate during the covered period at the same level of business activity due to complying with 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 Covid-19.

S CORP NOTE: To my S Corp owners that only have themselves on payroll. You would fall into the second or third bullet point category.

If you do NOT qualify, I have a guide for you here.

Yay! You get to use the EZ form…What now?

CHOOSE 8 OR 24 WEEK COVERED PERIOD

NOTE: If you received the PPP after June 5th, 2020 you MUST use the 24 week period.

Benefits of using an 8 week period:

Quicker forgiveness - if you are wanting to reduce loans ASAP to qualify for other financing needs this could be useful
Full Time Employee Headcount - it could be more difficult to keep your headcount during a 24 week period vs only 8 weeks
Applying earlier could mean you can take advantage of SBA rules as they are now, rather than whatever inevitable changes are coming

Benefits of using a 24 week period:

More funds to be covered - 24 weeks of payroll and non-payroll costs vs only 8 weeks
More certainty of the rules as they will be much more clarified 24 weeks down the road compared to today
More time to chat with advisors to utilize funds accurately

WHAT DOCUMENTS DO I NEED TO PROVIDE?

They have provided both required documents to submit and documents you need to have on file in case of audit. See here. It states you need to keep these documents for 6 years – how fun.

WHAT IS THE LOAN FORGIVENESS PROCESS LIKE?

Per guidance on 6/16/2020, loans are to be applied for forgiveness after the period ends. After 10 months of no forgiveness application, the repayments begin. Once the application is submitted the lender has 60 days.

WHEN DO REPAYMENTS START?

You start repayments once forgiveness is determined (this is a lot sooner than the 6 month rule they talked about) OR after 10 months of the end of the covered period if no application for forgiveness is received.

Guide for Schedule C Filers with No Employees

First of all, the amount of difficulty and work is incredibly different if you don’t have any employees and file a Schedule C. So I created a completely separate guide and calc specifically for you!

PAYROLL

The wage portion of your forgiveness is straightforward. It appears you will need your filed 2019 return, so perhaps you can’t ask for forgiveness until that’s completed.

For an 8-week period: Take 2019 Schedule C Line 31 divide by 52 and multiply by 8. This is your automatic forgiven amount (capped at $15,385)– you should not need anything other than your return to support this number.

For a 24 week period: Take 2019 Schedule C Line 31 divide by 12 and multiply by 2.5. This is your automatic forgiven amount (capped at 20,833)– you should not need anything other than your return to support this number. This should technically equal your exact loan amount if you applied for the right amount. This means that Sch C businesses with no employees should be able to get 100% forgiven.

Now skip to the non-payroll portion and that’s it! No need to deal with the other requirements.

NON-PAYROLL COSTS

They have not YET noted if personal expenses (home office, phone, etc.) count towards this piece. Since its not noted, it can be assumed that its allowed - however they may end up changing this.

Mortgage Interest
Rent and Leases
Utilities

This is all easily summarized in the calculation below! The finished product can be used when directly inputting into the forgiveness app.

Sch C - No Employee Calc

S Corp Owner Employee Only (no other employees)

I’ve made a specific guide for you as most of my client base falls into this category. This is when you have an S Corp business where you get paid a wage, but no other employees work for you.

PAYROLL

You are able to get all funds in the covered period forgiven as long as it doesn’t exceed 2.5 months of 2019’s salary or $20,833.

NONPAYROLL

Similar to Sch C filers, you can get forgiven on all of this up to 25%:

Mortgage Interest
Rent and Leases
Utilities

See the special calc I made just for your situation below. The finished product can be used when directly inputting into the forgiveness app, on tab 2 its referenced line by line.

S Corp Owner Only Calc

Businesses with Employees

I’ve created a spreadsheet! It has steps on calculating the entire forgiveness application. Each step is listed below and should be completed along with the spreadsheet.

This is specific to the EZ form and does not test your full time employee headcount or wage restoration. For those you need a different application here.

Select the spreadsheet depending on if you are using an 8 week or 24 week period (see pros and cons of each in the above section).

COMPLETE STEP 1

Enter basic information.

Payroll Expenses

In this section we will begin filling out the PPP forgiveness application. It supports the “ Schedule A and Schedule A Worksheet.”

Determine if you are using the “covered period” or “alternative covered period” as defined above
Gather all reports to support the eligible payroll costs below for the 8-week/24-week period:
- Gross wages, tips, commissions, paid leave and allowances for dismissal or separation pay
- Employer contributions to employee retirement plans excluding employee contributions and those for owners
- Employer contributions to health insurance excluding employee contributions and those for owners
- State and local taxes assessed on employee contributions excluding any employee withholding

FAQ’S ON PAYROLL

Can I use federal employer taxes?

No

Can I include 1099 subcontractors?

No

If I don’t meet the 60% what happens?

The calculation is not all or nothing, you’ll get forgiveness up to what you spent along with the other factors. Just follow the calculation spreadsheet.

NON-PAYROLL EXPENSES

These are the mortgage interest, rent and utilities expenses that can make up to 40% of the forgiveness calculation.

Gather non-payroll expenses related to the covered period – All these expenses need to have been in place by February 15th, 2020, any obligations created after this date will not qualify.

Mortgage interest expenses (excluding principle and prepaid)
Rent or lease expenses related to lease agreements for real or personal property
Utility payments – electricity, gas, water transport, telephone or internet

COMPLETE STEPS 2 & 3

Enter non-cash compensation, non-payroll related costs and employee info/wages.

FILLING OUT THE APPLICATION

The second tab in the excel spreadsheet outlines exactly how to fill out the form! Just enter line items right from it, add supporting documents (payroll forms). And done!

How to thank me

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