The Paycheck Protection Program loan forgiveness depends on two main factors:
To that end, WendroffCPA has created a simple checklist you can use to ensure you’re following the correct guidelines to maximize your loan forgiveness.
Spend at least 75% of the PPP funds on the following payroll costs:
Spend the remaining 25% of the PPP funds on these approved expenses:*
It’s critical to track your expenses correctly to prove them and qualify for forgiveness. We recommend this 6-step process:
If you’re self-employed, you still qualify for the PPP even if you don’t have employees. The difference is that your’e given a PPP loan based on the 2019 net profit, not 2019 payroll records. So you don’t need to spend 75% of the loan on payroll. Instead eight weeks worth of your 2019 net profit can automatically be forgiven, being treated as a replacement for profit. For the remainder of your funds, you will need to follow the above checklist.
Please keep in mind that the treasury is still updating guidance, and we will update this checklist accordingly.
If you have any questions at all related to the PPP loan or accounting/taxes in general, please contact us through the Free Quote button or email our director of communications Darren Wendroff at firstname.lastname@example.org.