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On Wednesday, June 17, 2020, the Small Business Administration and the Department of the Treasury released a Revised Application and a new EZ Application for Paycheck Protection Program (“PPP”) borrowers who are seeking forgiveness of their loans. These applications reflect the changes that Congress made to the PPP with the Paycheck Protection Program Flexibility Act of 2020 that was signed into law on June 5, 2020.
The EZ Application requires fewer calculations and less documentation than the Revised Application, but the instructions clarify that it is only available to borrowers that:
A. are self-employed and have no employees; or
B. did not reduce the salaries or wages of their employees by more than 25%, and did not reduce the number or hours of their employees; or
C. experienced reductions in business activity as a result of health directives related to COVID-19, and did not reduce the salaries or wages of their employees by more than 25%.
Those who do not qualify for the EZ Application must use the longer Revised Application.
The new applications give borrowers whose loans were made before June 5, 2020, the option of using the original 8-week covered period or an extended 24-week covered period.
To visit our COVID-19 Business Resource Center, including our previous Tax Law Alerts, click here.