Revised Loan Forgiveness Applications

On June 16, 2020, two new applications for PPP loan forgiveness were issued. These applications reflect changes related to the Paycheck Protection Flexibility Act (PPF). The two new loan forgiveness applications include an updated version of the original and also a new EZ version (Form 3508EZ).

Significant changes on the revised version include:

  • Extension of covered period from eight weeks to 24 weeks but in no event beyond December 31, 2020. Borrowers obtaining the loan prior to June 5 may still elect to use the original eight-week period if preferred.
  • The loan forgiveness amount must be comprised of 60% payroll costs, at a minimum
  • Exclusion of employer health insurance contributions made on behalf of a self-employed individual, general partners or owner-employees of an S-corporation
  • Exclusion of employer retirement contributions made on behalf of a self-employed individual or general partners
  • For owner-employees, a self-employed individual or general partner, compensation is capped at $20,833 (the two-and-a-half-month equivalent of $100,000 per year) for the 24-week covered period
  • An additional FTE Reduction Safe Harbor was introduced. A borrower is exempt if they are able to document that they were unable to operate between February 15, 2020 and the end of the covered period at the same level of business activity as before February 15, 2020, due to compliance with requirements established or guidance issued between March 1, 2020 and December 31, 2020 by government agencies, related to the maintenance of standards for sanitation, social distancing or any other worker or customer safety requirement related to COVID-19.
  • Calculations of FTE’s in the comparison periods have changed from average per month to average per week

The EZ version requires fewer calculations and less documentation and may be used by borrowers if ONE of the following applying:

  • The borrower is a self-employed individual, independent contractor or sole proprietor who had no employees at the time of loan application, and no employee salaries were included in the computation of average monthly payroll.
  • The borrower did not reduce the salaries or wages of their employees by more than 25% during the covered period compared to January 1, 2020 to March 31, 2020, AND did not reduce the number of employees or average paid hours between January 1, 2020 and the end of the covered period (other than reductions related to inability to rehire or hire qualified replacements).
  • The borrower did not reduce the salaries or wages of their employees by more than 25% during the Covered Period compared to January 1, 2020 to March 31, 2020, AND experienced reductions in business activity between February 15, 2020 and the end of the Covered Period as a result of health directives related to COVID-19.

If we can assist you in explaining the programs’ provisions, analyzing the potential benefits or helping you with gathering the needed information, please call any Sponsel CPA Group Team member or our colleagues listed below.

             Jason Thompson-Direct at 317-608-6694 or

             Eric Woodruff-Direct at 317-613-7850 or

             Lisa Blankman-Direct at 317-613-7856 or

This communication is intended to provide general information on legislative COVID-19 relief measures as of the date of this communication and may reference information from reputable sources. Although our firm has made every reasonable effort to ensure that the information provided is accurate, we make no warranties, expressed or implied, on the information provided. As legislative efforts are still ongoing, we expect that there may be additional guidance and clarification from regulators that may modify some of the provisions in this communication. Some of those modifications may be significant. As such, be aware that this is not a comprehensive analysis of the subject matter covered and is not intended to provide specific recommendations to you or your business with respect to the matters addressed.

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