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How To Apply For Payment Protection Program Loan Forgiveness

How To Apply For Payment Protection Program Loan Forgiveness

In last week’s blog, we discussed the continuing confusion surrounding the deductibility of eligible expenses by small businesses who have received loans through the Paycheck Protection Program (PPP). While that situation has yet to be fully resolved, another aspect of the PPP program, applying for loan forgiveness, is a bit clearer cut.

You might ask, “why are you writing about the PPP loan forgiveness in a multistate tax blog?” The answer is simple. One of the things we are proudest of, in our state tax consulting space, is that we too, are a small business. And we’ve had first-hand experience in working through the complexities of this process. We felt it was important enough from a national small business perspective to warrant some dedicated space!

Which Expenses Are Eligible For Loan Forgiveness?

Loans through the PPP are applicable for forgiveness, but to be forgiven, the funds must be used to cover the following:

-Payroll costs, including benefits (up to $15,385 per worker)
-Interest on mortgage obligations, entered into before February 15, 2020
-Rent, under lease agreements in force before February 15, 2020
-Utilities, for which service began before February 15, 2020

In addition, employee and compensation levels must be maintained, or employees must be quickly rehired. Plus, no more than 25 percent of the forgiven amount may be for non-payroll costs.

How To Calculate PPP Loan Forgiveness
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