Did you take a Paycheck Protection Program (PPP) loan for your freelance business of less than $50,000? If so, the U.S. Treasury Department and the Small Business Administration (SBA) just made applying for PPP forgiveness a little easier with a simplified loan forgiveness application (SBA Form 3508S).
The new interim final rule (IFR) provides guidance on the forgiveness and loan review processes for PPP loans of $50,000 or less. It states that taxpayers with loans meeting these criteria are exempted from any reductions in forgiveness based on:
· Reductions in full-time-equivalent (FTE) employees; and
· Reductions in employee salary or wages.
Keep in mind that this form can only be used if your total PPP loan amount is less than $50,000. If you had an affiliate business and your total in PPP loans pushed you over the $50,000 threshold, you cannot use the new application form. The streamlined IFR has been introduced because borrowers with smaller loan amounts do not have to calculate FTE or salary reduction calculations. However, your freelance business will need to provide specific certifications and documentation to your lender in regard to any payroll and nonpayroll costs that PPP funds were used for.