Richard GoldsteinRichard Goldstein

Updated Paycheck Protection Program loan forgiveness applications have been released by the U.S. Small Business Association and the Treasury Department in an effort to make the process easier for borrowers as well as reflect changes from the recent passage of the Payroll Protection Program Flexibility Act. Two versions of the loan forgiveness applications are now offered to borrowers.

Highlights of the PPP loan forgiveness applications

The full loan forgiveness application has been shortened from eleven pages to five pages.

Both applications give borrowers the option of using the original eight-week period—if the loan was made before June 5, 2020—or the extended 24-week covered period.

They include how to calculate forgiveness inclusive of the newly revised 60 percent payroll cost requirement.

Health insurance costs for S corporation owners can't be included when calculating payroll costs; however, retirement costs for S corporation owners are eligible costs.

They also include the addition of a safe harbor for businesses that have been unable to return to the level of business activity they had before the COVID-19 pandemic due to compliance with health and safety guidelines for slowing the spread of the virus.

Loan forgiveness application form EZ

A new, shorter version of the loan forgiveness application is available for certain borrowers. It requires less calculations and documentation than the full application. The three-page form can be used by borrowers that:

  • Are self-employed, independent contractor or sole proprietor that had no employees at the time of the PPP loan application; or
  • Didn’t reduce annual wages or salaries of any employee by more than 25 percent during the covered period or alternative payroll covered as compared to Q1 2020 and the borrower didn’t reduce the number of employees and the average paid hours of employees between January 1, 2020, and the end of the covered period (ignoring reductions from the inability to rehire individuals and reductions in hours offered to be restored and refused); or
  • Didn’t reduce annual wages or salaries of any employees by more than 25 percent during the covered period at the same level of business activity as before February 15, 2020, as a result of health insurance directives related to COVID-19 between March 1, 2020, and December 31, 2020.

The SBA issued a new, final rule on how to determine payroll costs and owner compensation when calculating loan forgiveness under the new 24-week covered period.

That new interim rule establishes the 24-week maximum amount for forgiveness at $46,154 per employee or $15,385 per employee for the eight-week covered period (plus covered benefits for employees). For owner compensation replacement, the forgiveness calculation is limited to 2.5 months’ worth of 2019 net profit, up to $20,383 for the 24-week period or up to $15,385 for those electing eight-week period.

Some other important news

We know your business is facing unprecedented challenges right now with the coronavirus (COVID-19), and we’re here to partner with you in any or all of it. We’re available to discuss the new government requirements, tax deadlines and relief efforts, as well as how to approach the business impacts of the outbreak. To help you stay informed about the ongoing issues impacting you, check out the Coronavirus Resource Hub on our website.


Richard Goldstein is a partner at Buchbinder Tunick & Company LLP, New York, Certified Public Accountants.