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How Do I Calculate My PPP Forgiveness Amount?

How Do I Calculate My PPP Forgiveness Amount?

Companies across the country are holding Paycheck Protection Program funds given to them as an incentive to retain employees during Stay-At-Home orders and other pandemic-related economic fallout. Recipients were given an 8-week window to distribute the funds and for some, that window is closing very soon.

If managed properly, the PPP loan will be forgiven 100%. This is great news! Now companies just have to figure out exactly how to complete their application for forgiveness and meet the all-important threshold that demonstrates 75% of the funds went to "payroll costs." If that's met, and the other 25% is shown to have been spent on specific other qualifying expenses, these business owners will be in the clear.

But there are still plenty of questions being asked and not all answers have been drafted/published yet. LBW encourages all PPP recipients to visit this page often as we will update the list of resources below. There are many sources of information and more still to come.

Listed below is a log of resources to help PPP recipients understand the program's loan forgiveness forms and guidelines.

Paycheck Protection Program Loan Forgiveness Application From the U.S. Treasury Department's website

Guide to PPP Loan Forgiveness - Published by the U.S. Chamber of Commerce and distributed locally through Chambers across America

Managing Your PPP Funding - Tamara Gurney, President & CEO of Mission Valley Bank, provides advice and answers about PPP funds and forgiveness. She also addresses EIDL funds management. Session was recorded on May 15, 2020, hosted by the Valley Industry Association. One important note: during the session, it was mentioned that premiums paid for Workers' Compensation insurance could be included in "payroll costs" when calculating forgiveness. Following this recorded session, guidance has been distributed that language in the PPP legislation is too vague and most banks are being advised not to forgive those amounts.

Update: FAQ Regarding Loan Forgiveness Under the Paycheck Protection Program - May 18, 2020: Written by Keith T. Zimmet, President, Managing Shareholder at Lewitt Hackman. This post addresses "Covered Period" vs. "Alternative Payroll Covered Period", costs incurred or paid outside the 8-week window, calculating FTE's or wage reductions, and more.

When an Employee Declines an Offer to Be Rehired at the Same Salary/Wages/Hours - May 4, 2020: Written by Keith T. Zimmet, President, Managing Shareholder at Lewitt Hackman. Addresses the concern about loan forgiveness amount when an employee declines to return to work.

PPP Flexibility Act signed June 5, 2020

Major Changes to Loan Forgiveness Rules Under the Paycheck Protection Program - June 4, 2020 by Keith T. Zimmet | President, Managing Shareholder at Lewitt Hackman. Here's an explanation of the major points of this PPP Flexibility Act.
Update re Major Changes to Loan Forgiveness Rules Under the Paycheck Protection Program - June 11, 2020 by Keith T. Zimmet | President, Managing Shareholder at Lewitt Hackman. An update to the previous post.
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