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U.S. Treasury Introduces Loan Forgiveness Form 3508S

At Gettry Marcus CPA, P.C. we continue to stay up to date on the recent developments regarding the Paycheck Protection Program (“PPP”), as provided by the U.S. Treasury. On October 8, 2020, the U.S. Treasury released an interim final rule regarding PPP loan forgiveness as well as the new PPP Loan Forgiveness Application Form 3508S.  

Recipients of PPP loans of $50,000 or less can utilize Form 3508S, except for those borrowers that together with their affiliates received loans totaling $2 million or greater.  

For example, if a PPP borrower received a $40,000 PPP loan for Company A and a $1,980,000 PPP loan for Company B, the PPP borrower would not qualify to utilize Form 3508S because the aggregate of both loans is greater than $2 million.  

PPP borrowers filing Form 3508S are exempt from reductions to loan forgiveness based on:

  • Reductions in full-time equivalent employees; and
  • Reductions in employee salary or wages.  

If a PPP borrower submits Form 3508S, the lender will still require the PPP borrower to:  

  • Confirm receipt of the borrower certifications contained within Form 3508S;
  • Provide documentation verifying payroll and non-payroll costs.

Lenders may accept borrower representations regarding loan forgiveness amounts as long as the PPP borrower provides documentation verifying payroll and non-payroll costs. Although the PPP borrower does not have to show the calculations used to determine their loan forgiveness on Form 3508S, the SBA may request to review loan forgiveness calculations and/or additional supporting documentation.  

See the below link to the new interim final rule published by the U.S Treasury.

https://home.treasury.gov/system/files/136/PPP–IFR–Additional-Revisions-Loan-Forgiveness-Loan-Review-Procedures-Interim-Final-Rules.pdf

Additionally, see the below links to the Form 3508S and Form 3508S Instructions.  

https://home.treasury.gov/system/files/136/PPP-Loan-Forgiveness-Application-Form-3508S.pdf

https://home.treasury.gov/system/files/136/PPP-Loan-Forgiveness-Application-Form-3508S-Instructions.pdf

If you would like additional information please contact your Gettry Marcus Advisor or Gabe Shurek, or Nicholas Backmann the authors of this article.

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