PPP Forgiveness Application Walkthrough | Incite Tax
Walk through Form 3508EZ for PPP loan forgiveness, from basic business info to calculating your forgiveness amount. The 24-week covered period usually works better than 8 weeks, and if payroll costs alone hit your threshold, skip other expense boxes to reduce what you need to verify.
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The purpose of this video is to show you how you can do your own PPP, or PPP, loan forgiveness application. All right, now, for those of you who didn't have ADP and you skipped forward to here, or for those of you who used the ADP system to populate this information, this is what the form looks like. You are going to put your business name here at the top. If you have a DBA, you're gonna put that there. Then you put your business address. So far straightforward, really simple. Put your business EIN, put your business phone number, your contact information, and then email information. All right. Now, if you have an SBA loan number that you're aware of, you would put that information there. I could not find any sort of loan number that I got directly from the SBA for this. So I left it blank, but I did find my loan number for Chase, and so I put that number here. Then we put the loan amount information here. The disbursement date— this disbursement date means when the funds hit your bank account, not the first payroll that you use them on, but the date the funds hit your account. Then you're going to put how many employees you had at the time you asked for the loan, and then you're going to put how many employees you have at the time you're asking for forgiveness. If you got an EIDL advance amount, go ahead and put that amount here. And then if you do put an amount here, you're going to want to put in your EIDL loan application number in this spot. Okay, so far so good. Payroll schedule. Go ahead and click the box which correlates or matches how you pay your employees. Do you do weekly payroll? Do you do every other week? Are you doing it twice a month? Or do you do it monthly or some other way? When you do that, then the covered period is the period in which you want to use, or that you used the funds. You can either choose an 8-week period from when the loan was disbursed or a 24-week period when the loan's disbursed. I went ahead and put in May 1st, 2020, and 24 weeks from there is 10/15/2020. I would say, for some random reason, if you're watching this and you got your PPP loan less than 8 weeks ago, then you wanna use the 8-week period. For everybody else, when we were getting these back in March and April, In May, go ahead and use the 24-week period because that just gives you a bigger window of expenses that were allowed so that your PPP loan amount is going to be forgiven. This is one of the weird scenarios that as of right now on a short-term fix, the government isn't trying to screw you. I'm not talking about the IRS here. They are trying to screw you by taxing you on this, but They really, what I should just say is the government wants these to be forgiven. And in all of our clients' cases that I'm looking at, like, it's going to be a weird scenario if something doesn't get forgiven. So pick the COVID period that gives you the best chance of getting it forgiven. For most of us, that's going to be 24 weeks. So I could put, if you notice, the disbursement date is April 6th. I could put April 6th here. And then this would change that to basically September 20th or something. That's fine. Either way, it's going to be fine. I went ahead and used these dates. Use your dates that work for you. Now, if for some reason you're requesting an alternative payroll cover period, you need to talk to your accountant. I'm not going to go into details about that. Then you're now going to enter in your costs. How much payroll did you run during your covered period? That's what we're figuring out. All these numbers are the numbers during your covered period, which are the dates here. So in the case of this example, it's May 1st to October 15th. So this company had $387,000 in payroll costs. If you had business mortgage interest payments, go ahead and put those here. If you have business rent or business utilities, go ahead and put those there. As I mentioned on the ADP video, which I'll repeat for those who may have skipped ahead to this part because you don't use ADP, if your payroll cost amount is sufficient to get you loan forgiveness, I would not waste any time putting in information in these other boxes. If your payroll amount isn't enough, Then that is when I would put information in these boxes. And the reason being, whatever numbers you put here, you are going to have to verify that those numbers are true. And I'm not saying they're not going to be true, I'm just saying it's more work. And so in this case, this 387 is more than sufficient. I'm not going to do any more work than I have to, so I'm leaving these numbers, other numbers blank. Then it just becomes a formula thing. You add up lines 1, 2, 3, and 4. You put that number here. So that's an addition. You take the amount that's up here on the PPP loan amount and put it here. Now you're going to do payroll costs, 60%. So you're going to divide line 1 by 60%, which honestly, whatever, to me seems like that should be multiplication, but it's their form. Put that there, and then your forgiveness amount, you're going to enter the smaller of these numbers, and the loan amount is the smallest number. I put that here, so that means these amounts based on these numbers, it's going to be forgiven. Next, you're going to read through all of these different options, and you're going to type in your initials next to it. Typing in your initials means that you're basically saying, yep, those statements are true. You're going to sign it at the bottom, print your name, put your date, title. So far so good. And then like all SBA things, they want you to fill out this information. Feel free to fill that out however you want. So like you would put your name here, the position you have in the company. And then they want you to put a number or an X if you don't want to disclose anything. Same with all these boxes. So really, if you wanted, you could just put X's across the board down here and you'd be fine. That is the 3508EZ application form. The 3508 normal form, which I'm not going to do a video on, is going to be for those people who maybe had to deal with employee turnover and couldn't rehire them, or they couldn't afford to keep them after the PPP loan amount happened, those forms are gonna have some additional calculations on it. You're, you know, probably just gonna wanna talk to your accountant to get those figured out, or try, try your best and talk to your bank. The banks are the one making the money off of this, so utilize their resources. All right, once you do that, You probably have enough information now to go to your bank. Your bank is then, in addition to the form, going to ask you to provide documentation. As I showed before, if you're with ADP, and I'm confident that most payroll companies are going to have this ability, they will have some sort of PPP loan package that you can print off that has your payroll information already in it. In the format that the SBA is going to ask for so that you can prove that it was used for the payroll costs. If you aren't using a payroll company to run your payroll and you're doing it manually, I would first ask you to question your sanity because that sounds crazy. That's payroll. You don't want to mess with payroll. It's a very black and white scenario. You either do it right or Or you do it wrong and they charge you penalties. And they do not let you get out of those payroll penalties very often. So for the sake of just an insurance concept, I like paying a payroll company to help me do it. I would not use Intuit payroll services, 'cause you're still doing it yourself using their software. And I've found that they never update their software the right way. So all my clients who use QuickBooks payroll services, where they're manually doing the information themselves, just using a software hoping it's gonna work, They often, often get notices about payroll mistakes. So just avoid all that. But anyways, that's, that's what you need to do. And your bank will likely have specific things that only they're going to ask for, or they're going to ask for it in a certain way. They're the only ones who will be able to answer the question of what it is that they actually need from you. It's like getting a loan. Submit this, follow the process, keep in communication with your bank. And you'll eventually get through it. And remember, the economy is squarely on the back of small business owners, which is your shoulders. So please keep, keep up the good fight. Stay out there. 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