PPP Updates (AGAIN)
Forgiveness Application
New PPP EZ Loan application Released: Overview
The SBA and Treasury issued a press release yesterday announcing the new PPP EZ loan application. Revisions were also made to the full forgiveness application. 

The application for full forgiveness is now more borrower-friendly and the addition of the EZ application is a change we have been eagerly awaiting. 

There is discussion about automatically forgiving loans of a value lower than $150K so stay tuned for that, if it comes to pass.
The EZ Application w ill be even faster to complete and we believe most dentists will qualify to use it. It is for borrowers meeting one of the following criteria:
  • Self-employed with NO employees at the time of applying for the PPP & did not include any employee wages in the PPP calculation (not S Corps--only independent contractors, sole proprietors) ; OR
  • Did not reduce the salaries or wages of their employees by more than 25%, and did not reduce the number of employees or the number of hours of their employees between Jan. 1st and end of Covered Period. This will not apply to most dental practices. OR
  • Experienced reductions in business activity as a result of health directives related to COVID-19 as compared to Feb. 15th and did not reduce the annual salary or wages of their employees by more than 25% during the Covered Period compared to Jan. 1 - Mar. 31. This will apply to most dental practices.

New PPP EZ Loan Application Released: Additional Details
Full details related to the PPP EZ forgiveness application can be found in the instructions for the application. If you would like to review the application click HERE. The following details are key for you right now:
  • You will be asked to provide the number of employees at the time of the loan application and the number of employees at the time of the forgiveness application. Employees at the time of the loan application = headcount (not full time equivalent). They are looking to confirm if you are under 500 employees.
  • You still have the option to choose an Alternative Payroll Covered Period.

Alternative Payroll Covered Period - Most should choose this option, it will make the payroll reports required to submit easier.

  • First payroll that begins on or after you received your loan. This is not the pay date, the first day of the pay period.
  • Continues through 24 weekly or 12 bi-weekly pay periods.

UPDATE - Full Time Equivalents (FTE) 
  • You need to have same number of FTE on 12/31/2020 as you had on 2/15/2020. 
o   Or the earlier of 12/31/2020 or when you file the application, whichever comes
  • If your numbers decreased due to COVID-19 (CDC recommendations), you do not have to worry about this safe harbor.

If you file the EZ form, you do not have to report FTE. This is only required on the long application.

UPDATE - PPP Tracker

This has been updated to reflect the updated changes and to match the EZ application. (Edition #3)

*Please note if you downloaded the updated tracker on 6/17/20, this has since been updated, to include the information you will need for the application.
PPP Limits for $100K+ Earners Increases
The application increases the amount of PPP funds that can be used on payroll for employees earning $100K or more but with some key caveats.
  • PPP funds may be used to pay employees (Associate/Non-Owner) earning $100K or more up to $46,154 during the covered window, if using 24 weeks. (An increase from $15,385).
  • Maximum pay to Owners is capped at $20,833 (2.5 month equivalent $100K/yr)
Calculation based on $100,000.00 / 12 months *2.5 = $20,833.00
  • Note that, for an 8 week Covered Period, the amount is capped at the lesser of 8/52 of your 2019 compensation or $15,385.
  • "Owner" is defined as "owner-employees; a self-employed individual, or general partners". 
PPP Spending Clarification:
The SBA provided some additional clarity that we have been awaiting for weeks.

  • Health insurance: you can only include the employer paid portion of premiums for the employees. Owners, as defined above, are now excluded from receiving forgiveness on Owner premiums.

  • Retirement plan contributions: these are also only allowed for employees and not self-employed individuals or general partners with the exception of "owner employees" (such as in a Corporation). Owner-employees are allowed to use PPP funds for up to 2.5 months' worth of the 2019 contribution. 
PPP Spending - Updated Recommendations

Updated Recommendation - Based on the new changes, you report gross payroll only. It will make it much easier to submit forgiveness, as you will only need the payroll reports. In addition, it leaves no questions from the bank on what items qualify (everyone agrees with the Gross payroll). With the extended period of time, you should be able to use all the funds on gross payroll. There should be no reason you need the funds for the other expenses. Again, this will make it easier to submit and answer questions. For example, if you use funds for rent, you will have to submit your lease agreement, along with cancelled checks. 

FAQ: What if you already used money to pay for retirement, health insurance, rent & utilities? Not a problem, the form says you don’t have to include those amounts on the form, just the total amounts you want forgiven. Therefore, if you end the covered period and your gross payroll during the covered period is greater than your loan amount, you will only report on the form the payroll amounts.

FAQ: I transferred money from PPP account to the operating account, do I need to transfer that money back into the PPP account (or vice versa).  You are not required to do that, they have made this a little easier. The money could have been used for those items, but if the payroll costs are greater than the amount of the loan, you would only report the payroll on the form.

If you want to transfer it back, so that only the payroll amounts come from the PPP account, you can.  

UPDATES - Miscellaneous

The 24-week period is automatic, if you want to use the original 8 week period, you have to elect that it on the application.

10 Months after your covered period ends to apply for forgiveness. This was the last information we received on applying.

As a reminder, the deadline to apply for a PPP loan is June 30, 2020, if you have not previously applied or received a loan.
Thank you for being the best clients during the most stressful time we have ever gone through. Stay safe, sane and patient with yourselves and your team!
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Every effort is made to provide accurate and complete information in Coleman, Ureda, Alford & Kaucher, PA publications. This information is being provided as a courtesy to our clients and is based on the best of our knowledge at this time. Please understand the COVID-19 situation and related law/bills are ever evolving. The law/bills are being interpreted and adjusted by various agencies on a frequent basis. Thus, we cannot guarantee that this information remains up-to-date.