PPP Spending - Updated Recommendations
- 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.
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.