To apply for loan forgiveness, you can submit an application to your lender.įor both first and second PPP loans, payroll costs for small businesses include compensation to employees whose principal residence is in the U.S. Lenders are responsible for approving and denying loan forgiveness. Such forgiveness reductions may be avoided if borrowers rehire FTEs or restore employee salary or wage reductions on or before December 31, 2020, or conduct such rehiring and restoration of wages no later than the last day of the loan’s covered period for loans made on or after December 27, 2020, as described in SBA guidance Your forgiveness amount may be reduced based upon reductions in full-time equivalent (FTE) employees or reductions in employee salaries or wages since the first quarter of 2020.The covered period is a period running from 8 to 24 weeks from the time you receive your loan proceeds. To be eligible for forgiveness, eligible costs must be paid during your covered period, or incurred during your covered period and paid by the next regular payroll date, billing date, or health insurance premium due date, as applicable.Owner compensation forgiveness is subject to limits that vary depending on the type of owner.Cash compensation for which forgiveness is sought may not exceed $100,000 annualized per employee.No more than 40% of the forgiveness amount may be attributable to eligible non-payroll costs. At least 60% of the forgiveness amount must be attributable to eligible payroll costs.In general, loans may be forgivable, in whole or in part, if the funds are used as directed by the SBA, including but not limited to the following criteria: How to qualify for Paycheck Protection Program loan forgiveness
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