The U.S. Treasury Department and Small Business Administration released a new, shorter version of the loan forgiveness application and introduced an even shorter EZ version for some borrowers. The changes are designed to make it easier for businesses to realize full forgiveness of PPP loans, but several tests and safe harbors were put into place.
To use the 3508EZ form, you must meet ONE of the tests below.
Form 3508EZ does not include any calculations on the reduction in FTEs or a reduction in payroll. However, this simplified form still requires borrowers to maintain support for wages, hours, and FTE count numbers at or above those of the reference period. Form 3508EZ does not allow for any safe harbors because of the levels required to be maintained to use this form.
Form 3508 follows the prior released form and includes updates for the changes in the PPP. The application does point to 3 safe harbors that are available to borrowers:
Form 3508 requires that documentation be submitted with the application to substantiate payroll costs, FTE numbers, and non-payroll costs. However, the borrower must be required to obtain, but not submit, documentation on each employee’s individual pay, including salary reduction calculations, documentation on job offer and refusals, documentation on inability to operate due to compliance with governing bodies, and documentation to support the restoration of FTE count.
Even though there is a simplified application, the supporting documentation requirements remain such that — unless you are a sole proprietor with no employees —borrowers are still expected to submit and maintain detailed records for their applications, including employee counts (FTEs), salary levels, and hourly pay rates.
For help navigating the applications or if you have questions about the PPP loan forgiveness process, contact us at PPPForgiveness@hornellp.com. To sign up for our HORNE’s Forgiveness Assistance Program, click the button below.
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