The Small Business Administration (SBA) has released initial details regarding the forgiveness of Paycheck Protection Program (PPP) loans. If you received a PPP Loan through us, you will need to submit an application for forgiveness and supporting documentation to us in order for your loan to be forgiven.
Use Form 3508, unless you meet one of the three qualifications listed below. If you meet one of these three items, use Form 3508EZ
- You are self-employed individual, independent contractor, or sole proprietor with no employees at the time of the PPP application and did not include any employee salaries in the computation of average monthly payroll in your PPP Application
- You did not reduce salaries or wages of any employee by more than 25% during the Covered Period or Alternative Covered Period compared to the period between January 1, 2020 and March 31, 2020. And, you did not reduce the number of employees or average paid hours of employees between January 1, 2020 and the end of the covered period. (You may ignore reductions that arose from the inability to rehire individuals who were employed on February 15, 2020 if you were unable to fill positions on or before December 31, 2020 or if the employee refused an offer from you to restore their hours.
- You did not reduce salaries or wages of any employee by more than 25% during the Covered Period or Alternative Covered Period compared to the period between January 1, 2020 and March 31, 2020. And, you were unable to operate during the Covered Period at the same level of business activity as before February 15, 2020, due to compliance with requirements established or guidance issued between March 1, 2020 and December 31, 2020 by the Secretary of Health and Human Services, the Director of the Centers for Disease Control and Prevention, or the Occupational Safety and Health Administration, related to the maintenance of standards of sanitation, social distancing, or any other work or customer safety requirement related to COVID-19.
Supporting documentation required to process the PPP loan forgiveness include:
- Payroll Documents
- Bank Account Statements or third-party payroll service provider reports documenting cash compensation.
- Tax forms or payroll reports overlapping with the 24-week or 8-week period for payroll tax filings and state quarterly wage reporting and unemployment insurance tax filings. Examples: IRS Form 941, State Quarterly Payroll reports, etc.
- Payment receipts, cancelled checks, or account statements documenting payment of employer contributions to employee health insurance and retirement plan.
- Sole Proprietors, Owner-Employees, and Self Employed Individuals must also submit your 2019 IRS Form 1040 with supporting Schedule C or Schedule F or business income. For Partnerships, also include copies of the 2019 K-1 Forms.
- Full-Time Employees (FTEs):
- Documentation showing the number of FTEs for the 24-week or 8-week period. Documentation may include payroll tax filings and state quarterly wage reporting and unemployment insurance tax filings. Examples: IRS Form 941, State Quarterly Payroll reports, etc.
- Documentation showing number of FTEs for your chosen base periods. Base Periods may be between February 15, 2019 and June 30, 2019 OR January 1, 2020 and February 29, 2020. For seasonal businesses, you also have an option to select a consecutive 12-week period between May 1, 2019 and September 15, 2019.
- Non-payroll Expenses:
- Documentation verifying existence of obligations/services prior to February 15, 2020.
- Documentation demonstrating eligible payments from the Covered Period.
- Examples by Non-payroll expense type:
- Business mortgage interest payments: amortization schedule and cancelled checks or lender account statements from February 2020 and covering the 24-week period.
- Business rent and lease payments: copy of current lease and receipts or lessor account statements from February 2020 and covering the 24-week period.
- Business utility payments: copy of invoices or account statements from February 2020 and the 24-week period
If you are a small business, sole proprietor, non-profit or church, that received one of these loans through 1st State Bank, please fill out and upload the following web form. Please note, we cannot process PPP Forgiveness for businesses who received PPP funds with another bank.