PPP Loan Forgiveness Simplified

Borrowers with loans of $50,000 or less are now able to apply for forgiveness using a simplified application. Under a new Interim Final Rule issued by the SBA, these borrowers are exempted from reductions in forgiveness based upon
1 – Reductions in full-time equivalent (FTE) employees, and
2 – Reductions in employee salaries or wages during the covered period
This streamlines the forgiveness process because these borrowers no longer have to do those computations.
These recipients are still required to make significant certifications and provide documentation, but the changes make it easier.
This by no means, is automatic forgiveness.
Lenders are still required to
1 – Confirm receipt of the borrower’s certifications contained in the form, and
2 – Confirm receipt of the documentation the borrower is required to submit to aid in verifying payroll and non-payroll costs
Borrowers are still required to provide an accurate calculation on the loan forgiveness amount, and must attest to its accuracy. These forms can still be audited, but lenders are permitted to rely on borrower representations.
To accomplish this, they have created a new form. That’s right. Now there are three. The new 3508S can be found at the following web address
Okay. Great. Now what?
They still haven’t done anything about the taxable consequences of forgiveness. This would require legislation. It doesn’t look like that will happen, if it ever does, before the election.
Also, this only affects loans below $50,000. There are no changes on loans above that mark. Now that we have some movement on the smaller loans, we may get some movement on the others.
Both sides of the aisle have indicated a desire to streamline forgiveness on loans below $150,000. We have ten months after the end of the covered period to apply for forgiveness. I would advise patience. Let’s see what happens after the election.
Let me leave you with this.
I’m getting a lot of questions from clients talking about moving to other states. Many are considering putting their homes up for sale given the violence which is now prevalent in their neighborhoods. Whether it’s the looting and riots we had earlier this year or the car jackings and crime that continue, many are past the point of wanting to stay.
Others are concerned about what will happen if the “Fair Tax” passes in November. Many are rightly concerned that the politicians are yet again, coming for their money.
Thank God, I’m licensed at the federal level. I have the same rights and privileges all over the United States that I have in Illinois. Thirty percent of my practice is out of state, with another seven percent being international clients who own domestic entities.
Given that I do so many tax returns from California to New York, I would suggest caution. If they don’t get you one way, they find another. States that have lower property taxes generally have higher income taxes. Most states have a graduated income tax system that goes up to seven or nine percent.
Most other states tax retirement income as well. Those of you who are younger, might not realize that our state does not tax social security payments or distributions from retirement accounts.
Certainly there are many states like Florida that do not have a state income tax, but generally those states make up for it in other ways. Transfer taxes on real estate, annual vehicle taxes, or taxes on anything they can possibly imagine are high.
I am suggesting that you be cautious and prudent in your choices. Know what you’re getting into. The grass is always greener on the other side, but is it really that green?
Be careful. If you do move, we can certainly help, and know that we will always be there.
Accounting Solutions Ltd. stands ready to protect you, your family, and your business. If there is anything you need, whether you are a current client or not, you have but to ask. I’m here and I remain,
Sincerely yours,
Chris Amundson
Accounting Solutions Ltd.
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