Businesses borrowing in the second round of PPP would be eligible for loan forgiveness equal to the sum of their payroll costs, as well as covered mortgage, rent, and utility payments, covered operations expenditures, covered property damage costs, covered supplier costs, and covered worker protection expenditures incurred during the covered period. The 60/40 cost allocation between payroll and non-payroll costs in order to receive full forgiveness will continue to apply.
Learn About Additional Eligible Expenses:
The Act makes the following expenses allowable and forgivable uses for PPP funds:
- Covered operations: Payment for any software, cloud computing, and other human resources and accounting needs.
- Covered property damage: Costs related to property damage due to public disturbances that occurred during 2020 that are not covered by insurance.
- Covered supplier: Expenditures to a supplier pursuant to a contract, purchase order, or order for goods in effect prior to taking out the loan that is essential to the recipient’s operations at the time at which the expenditure was made. Supplier costs of perishable goods can be made before or during the life of the loan.
- Covered worker protection expenditure: Personal protective equipment and adaptive investments to help a loan recipient comply with federal health and safety guidelines or any equivalent State and local guidance related to COVID-19 during the period between March 1, 2020, and the end of the national emergency
In preparation for your First Draw PPP application, organize your documents before hand by following the below checklist:
– 2019 Business Tax Returns
-Complete 2019 & 2020 IRS Quarterly 940, 941, 944 payroll tax reports
-1099’s for independent contractors for 2019 & 2020
-Unexpired Government issued identification
-2019 & 2020 Schedule C for Sole Proprietors
-2019 and 2020 Payroll reports for a twelve-month period (ending on your most recent payroll date) which will show the following information:
- Gross wages for each employee, including officer(s) if paid W-2 wages
- Paid time off for each employee
- Vacation pay for each employee
- Family medical leave pay for each employee
- State and local taxes assessed on an employee’s compensation
-Documentation showing total of all health insurance premiums paid by the company owner(s) under a group health plan
-Documentation showing the sum of all retirement plan funding that was paid by the company owner(s). (not including deductions from employee’s paycheck)
- Include all employees and owners
- Include 401K plans, Simple IRA etc.
For further PPP guidance, SBA, in consultation with the United States Treasury Department, has released the following resources :
For more information and updates, visit SBA.gov/PPP or Treasury.gov/CARES
The Consolidated Appropriations Act, 2021 extends the Paycheck Protection Program (PPP) through March 31, 2021.
Additional guidance will be available HERE.