Form 3508S – a one-page application for borrowers that received a PPP loan of $150,000 or less.New guidance on the PPP loan forgiveness application includes the release of four new / updated forms: Updated PPP Loan Forgiveness Applications and Rules: Calculation considerations for businesses not in operation a full year prior to February 15, 2020.Documents required to substantiate payroll costs used to determine your maximum second-draw PPP loan amount.How the following types of businesses should calculate their second-draw PPP loan maximums: self-employed (with or without employees), partnerships, S corporations, C corporations, nonprofit organizations, religious institutions, veterans organizations, tribal businesses and LLC owners.The remaining 16 questions cover how a PPP borrower can calculate the maximum amount they can receive for a second-draw PPP loan.How to demonstrate a gross receipts reduction if you are using your company’s annual income tax returns.Documentation needed to show a 25% reduction in gross receipts, including internal financial statements, bank statements or tax returns.Eight of the 24 questions deal with how to determine if a PPP borrower experienced the 25% decline in gross receipts required to apply for a second-draw PPP loan.Similarly, gross receipts for nonprofit organizations will be defined by section 6033 of the Internal Revenue Code. The guidance addresses the relationship between calculating gross receipts and the accounting method the borrower uses, stating that in the case of a for-profit business, gross receipts are defined as generally all revenue in whatever form received or accrued, which is determined in accordance with the borrower’s accounting method (e.g., accrual or cash) used for federal income tax return purposes.Here is a snapshot of some of the items the new guidance covers: The guidance is structured in the form of 24 questions and answers addressing a variety of situations. The guidance for second-draw PPP loan calculations and the documents borrowers must provide to support each set of calculations came in the form of an 18-page document. The following blog post discusses each of these updates and highlights what your business needs to know. ![]() Small Business Administration (SBA) and Treasury released guidance for how Paycheck Protection Program (PPP) borrowers should calculate revenue reduction and maximum loan amounts for second-draw PPP loans and published updated PPP loan forgiveness guidance and forms. ![]() ![]()
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