There are four different Loan Forgiveness applications available for PPP. We'll break down each form so you can determine the one to use.
Use the Form 3508S when
- Your PPP loan is $150,000 or less
Use Form 3508EZ when
All of the following apply:
- Your PPP loan size is greater than $150,000,
- You did not reduce the annual salary or hourly wages of any employee by more than 25% during your covered period (relative to the most recent full quarter before your covered period), and
- Either:
- You did not reduce the number of employees or average paid hours of employees between January 1, 2020, and the end of your covered period.1
OR
-
- During your covered period, you were unable to operate at the same level of business as before Feb 15, 2020, due to requirements issued by the Secretary of Health and Human Services, the Director of the CDC, or OSHA, relating to the maintenance of standards of sanitation, social distancing, or other work or customer safety requirements associated with COVID-19.2
To determine if you qualify to use Form 3508EZ, do not count employees who receive pay at an annualized rate of more than $100,000 in any single period during 2019.
Use Form 3508 when
- Your PPP loan is greater than $150,000
- You do not qualify for 3508EZ
Use Form 3508D (Disclosure of Certain Government Officials and Spouses) when
If the President or Vice President of the United States, the head of an Executive Department (as defined in 5 U.S.C. § 101), a member of Congress, or a spouse of any of the foregoing owns a “controlling interest” in your business, you must complete and submit Form 3508D.
- A “controlling interest” means voting, controlling, or holding 20% or more (by vote or value) of the outstanding amount of any class of “equity.” You must aggregate interests controlled by an individual and their spouse when determining the controlling interest amount.
- For purposes of Form 3508D, “equity” means (1) shares (regardless if they are transferable or classified as stock), (2) capital or profit interest in an LLC or partnership, or (3) warrant or other right (other than a right to convert), to purchase, sell, or subscribe to a share of interest described in (1) or (2).
Second Draw Loans Over $150,000
If you received a Second Draw PPP loan greater than $150,00, you must apply for forgiveness for your First Draw before or at the same time as you apply for forgiveness on your Second Draw. This applies even if your calculated forgiveness amount for the First Draw is zero.
1 Ignore reductions that arise from an inability to rehire workers who were employed on Feb 15, 2020, if you were unable to hire similarly qualified employees for unfilled positions on or before Dec 31, 2020 (or if your loan was made after Dec 27, 2020, before the last day of your covered period). Also, ignore the reduction in hours that you offered to restore, and the employee refused. If an employee has rejected a rehire offer, you must notify your state's unemployment insurance office within 30 days of the rejection. You also must keep records documenting written rehire offers, written rehire rejections, and written records of attempts to rehire similarly qualified people.
2 These requirements must have been issued between (1) Mar 1, 2020, and Dec 31, 2020, or (2) if your PPP loan was made after Dec 27, 2020, between Mar 1, 2020, and the last day of your covered period.
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