Paycheck Protection Program – Loan Amounts & Forgiveness
Loans will be eligible for forgiveness in an amount equal to the sum of the following costs incurred and payments made during the 8-week period following loan funding. At least 75% of the total forgiveness amount must represent payroll costs. The remaining 25% can be allocated to rent and interest on mortgage obligations (beginning before 2/15/2020), or payment for utilities (electricity, gas, water, [transportation, telephone, or internet access) for services beginning before 2/15/2020.
Your forgiveness amount will be reduced if, as compared to prior periods, you’ve reduced the number of your full-time employees, or if compensation across employees earning $100,000 or less was reduced by more than 25%. If your business reduced your workforce or their salaries, the SBA may allow you until June 30, 2020, to rehire and increase salaries to avoid some/all of this reduction. However, 75% of the forgiveness amount must be attributable to payroll costs over the eight-week loan period.
Required documentation will likely include:
- Verification of the number of employees on your payroll and pay rates, including IRS payroll tax filings and state income, payroll and unemployment insurance filings
- Cancelled checks, payment receipts, transcripts of accounts, or other documents verifying payments on covered mortgage, lease obligations and utilities payments