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As lawmakers debate the next stimulus package, numerous business owners continue to await clarity on the Paycheck Protection Program (PPP) and the path to loan forgiveness. The PPP, part of the $2.2 trillion CARES Act, provides forgivable loans to small businesses to cover up to eight weeks of payroll costs. Nearly 5.1 million loans totaling over $521 billion have already been distributed. Small businesses still have the opportunity to apply for the remaining $130 billion before the August 8 deadline.
This week, the Small Business Administration and Department of the Treasury unveiled a 10-page document addressing 23 of the most common questions borrowers have regarding PPP loan forgiveness. The updated guidelines include four key sections: general loan forgiveness, payroll costs, non-payroll costs, and loan forgiveness reductions.
While you may be eager to finalize the PPP loan forgiveness process, some unanswered questions remain. As reported by the Journal of Accountancy, full clarity on how loan forgiveness reductions apply to full-time equivalent (FTE) employees is still missing.
There has been ongoing discussion about expanding PPP loan forgiveness in the next stimulus package. According to the Washington Business Journal, more lawmakers are advocating for the forgiveness of smaller PPP loans. Senate Republicans proposed automatic forgiveness for loans under $150,000 in the HEALS Act, along with some forgiveness options for loans between $150,000 and $2 million. However, we will have to wait until Congress reaches a consensus on a new deal.
In the meantime, you can begin the application process for PPP loan forgiveness using this free tool from the American Institute of CPAs (AICPA) and CPA.com. However, it's important to hold off on submitting Form 3508EZ until we have the complete guidelines.
