If you’re a small business owner and you haven’t yet filed for forgiveness of your Paycheck Protection Program (PPP) loan, your time might be running out. The PPP loan program provided a means for small business owners to continue to pay their employees during the COVID-19 crisis. The program provided businesses with up to $100,000 a year per employee annually, and will be forgiven as long as the money is used only for payroll and necessary business expenses.
How to determine your deadline
To have your PPP loan forgiven, you must apply for forgiveness within 10 months of the last day of your covered period. Your covered period is 24 weeks after your disbursement date.
For example, let’s say you received your PPP payment on May 1, 2020. Your covered period would extend through October 16 of the same year. That would make your deadline to file for forgiveness August 16, 2021. If you took advantage of the PPP program last year, be sure to file for forgiveness before it’s too late.
SBA direct forgiveness
If you borrowed less than $150,000, you may be eligible to use the SBA’s direct forgiveness portal. This will allow you to file for forgiveness directly with the SBA for a faster decision. The majority of loans issued fall within these payment guidelines. The portal launched on August 4, but you may have to wait to see if your lender joins the portal in order to utilize it. The SBA has created a step-by-step guide on how to use the portal.
Managing the finances for a business is a complicated task, and for many business owners, dealing with PPP loan forgiveness is just another burden to deal with. If you need assistance, Royce CPA Firm can help answer your questions about PPP forgiveness as well as assist with bookkeeping, taxes, and other business services. Give us a call today at (520) 321-4626 to speak with one of our CPAs.