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3508 s Application

New 3508S form: PPP forgiveness simplified for loans of $50,000 or less

by stacy

In spite of the challenges we face, there is still cause for celebration. A few weeks ago, it was reported that the Paycheck Protection Program (PPP) forgiveness plan would, for borrowers whose loan amounts were less than $50,000, be subject to some relaxations.

The Small Business Administration (SBA) now makes it possible for smaller borrowers to take advantage of certain benefits, which are as follows:

There will be no reduction in the overall amount that is eligible for forgiveness, regardless of whether or not your company has cut its staff or salaries (FTE)
It is not necessary for you to submit the computations that detail how you determined the sum to be forgiven.
Simpler supporting document rules
With the introduction of the new 3508S application form, the process of applying for tax forgiveness has been made far more user-friendly for owners of small businesses. This is a rather brief and uncomplicated form that just takes up one page. Continue reading to learn how to complete this form in an online setting:

How to fill in the 3508S application for PPP forgiveness

After you have downloaded the 3508S application, you will need to fill in the necessary facts such as your business name, contact information, the PPP loan number and amount, the number of employees, and your tax identification number. Be remember to include the details of the EIDL loan application as well if you have already submitted one.

Additionally, ensure that the amount of forgiveness is accurately calculated and entered into the appropriate field.

Representations and certifications

After that, you will need to incorporate your initiative into a few different certifications and representations. The following are some examples of what it incorporates in a general sense:

You have merely asked for the principle amount of the PPP loan to be forgiven in its entirety through your request.
The PPP financing was not utilised in any manner that was not permitted.
The amount of forgiveness has been determined with precision.
You have provided information and documentation that is both accurate and complete.
Because the SBA investigates all requests for loan forgiveness, you should provide truthful responses and keep your PPP records for a period of six years, in the event that they ever need to cross-check your assertions.

Sign remotely

Last but not least, this is the part of the form where you can verify that you agree with the information that has been provided. You may speed up the process of filling out this form by using an electronic signature solution like Signeasy, which is very helpful in this day and age when everyone is working remotely.

Don’t forget the attachments!

You are not have to show the mathematical calculations behind how you arrived at the amount of forgiveness; nonetheless, you will be required to collect and present the proof of your spending.

It is important to keep in mind that in order to be eligible for loan forgiveness, at least sixty percent of the PPP loan should have been spent on things such as salary, health insurance, state and local taxes, and retirement benefits. The remainder can be put toward the payment of other expenses, including rent, a mortgage, and utility bills.

Expenditures of payroll – Claiming forgiveness for payroll costs is the simplest way to do so. Because small and medium-sized businesses (SMBs) now have 24 weeks to spend their loan earnings, it is possible to have the remaining balance of the loan cancelled if the money is spent entirely on labour expenditures. When it comes to gathering evidence of payment, there are a few points that should be kept in mind:
Make sure that you provide payroll data from the payroll service in order to establish that sufficient expenditures can be forgiven.
Bank statements or cancelled checks that prove payment of salary to employees or from business to oneself (for self-employed individuals) are acceptable forms of evidence.
The maximum amount of payroll tax forgiveness that you can hope to receive from a business owner is $20,833.
If in addition to a PPP Advance, your company has also obtained an Economic Injury Disaster Loan (EIDL), the total amount of PPP forgiveness to which you are entitled will be reduced by this amount.
Always remember to only count “gross pay” when calculating the total amount forgiven; this is the amount that appears on the paycheck in addition to FICA taxes, state income taxes, and federal income taxes.
Costs not related to wages that can be waived: Put on display any receipts or cancelled checks pertaining to corporate expenses such as rent, mortgage interest, and utility bills. Include further evidence, such as a contract or agreement (including a loan amortisation schedule for mortgages, if applicable), which demonstrates that the costs were being carried by the small business prior to February 15, 2020.
Inexcusable costs not related to payroll: It is extremely unlikely that you will be required to submit a claim for these charges. But if you absolutely had to, all you would need to do is submit evidence that proves the commitments and services were performed before February 15, 2020. Include evidence of any eligible payments made during the time covered by this claim.
How long does it take for the act of forgiveness to be processed?
Find out what requirements your bank is placing on customers and whether or not they are currently accepting applications.

When you have finished preparing all of these paperwork, simply hand them over to the financial institution or lender from where you obtained the PPP loan. They have a period of sixty days during which they will consider your appeal, and if it is successful, they will forward your application to the SBA. After the application has been reviewed by the SBA, which can take up to ninety days, the SBA will pay off the loan (on your behalf and directly to the lender or bank) once it has been accepted. In the end, you will have to wait a total of 150 days before the loan is completely paid off.

Are you itching to send in the form?
You may want to hold off on submitting the papers and closing the book on this loan for a little while longer even though I understand the temptation to do so. The rules governing the PPP forgiveness programme appear to be undergoing frequent and significant revisions, such as the recent extending of the “spending window” for PPP funds to a period of 24 weeks.

Note that there is also legislation that is seeking approval that allows small and medium-sized businesses that have taken out loans of more than $50,000 but less than $150,000 to fill out a form that is very similar to the one described above.

Having said that, ensure that you compile all the necessary supporting documents and complete the 3508S application before submitting it. Sign the form electronically with eSignature software like Signeasy. Keep it ready so that you can easily hand it in when you are confident that you will receive the maximum value for your forgiveness.

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