Allevity Blog

Finally! An "EZ" Solution to Forgiveness

Jun 22, 2020

Heads up! SBA and U.S. Treasury policy changes have been frequent (and frequently unpredictable). The information below may have changed since it posted. For the most up-to-date information, call us at 800-447-8233 or email us at ppp@allevity.com.

Can you answer “Yes” to any of the following questions? If so, you’re in luck! New SBA and Treasury guidelines have made a simple new form for those who qualify. If you do, your PPP forgiveness is on the path to "EZ" Street.

For EZ filers only, the lookback period is now January 1–March 31, 2020.

Say Yes 

If you can say yes to any one of the following three questions, you are eligible to use the EZ forgiveness application: 
 
  1. Are you self-employed with no employees? If your PPP loan application states you had neither employees nor used any employee compensation in your average monthly payroll computation, you are eligible for the “EZ” application.

  2. Has your business lost revenue since February 15, 2020 due to official compliance requirements, sanitation or social distancing standards, or any other safety requirement related to Covid-19? (Official guidance is considered that offered 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.) 

If you also did not reduce annual salaries or hourly wages by more than 25% compared to your lookback period, you are eligible for the EZ application. (Excludes employees who made over $100k in 2019.)

  1. Did you avoid reducing employee count and maintain average paid hours between January 1, 2020 and the end of your Covered Period? Exclude employees on 2/15/2020 who meet either of these two criteria from your calculations: 
    • Those who refused an offer of rehire or restoration of hours on previous terms  
    • Those for whom you were unable to find a suitable replacement by December 31, 2020.

If you also did not reduce annual salaries or hourly wages by more than 25% compared to your lookback periodyou are eligible for the EZ application. (Excludes employees who made over $100k in 2019.)

Required Documentation  

Borrowers must maintain documentation supporting: 
  • Salaries and wage rates
  • Job offers, refusals, firings, voluntary resignations, and reductions in work schedules 
  • FTE calculations
  • Certification that Borrower operations were limited due to COVID-19 compliance requirements 
For question No. 3the SBA requires documentation of average FTE calculations from January 1 to the end of the Covered Period.
 
Borrowers aren’t required to provide Schedule A or individual employee information.
 

New Covered Period Options 

Recent guidance defines the Covered Period more clearly, allowing for more flexibility than an either/or interpretationThe Covered Period is now defined as:
  • For loans received before June 5, 2020, borrowers may elect to use an 8-week (56-day) Covered Period; 

or,

  • a 24-week (168-day) period beginning on the PPP loan distribution date.
Can't wait 24 weeks? You can apply for forgiveness as soon as you've spent your loan funds.
 
The definition of the Alternative Payroll Covered Period has not changed, and it accommodates the 24-week option as well. (See New Guidance Clarifies the PPP Forgiveness Period for more information and definitions on Covered Period and Alternative Payroll Covered Period.) As always, borrowers should compare their Covered Period to their lookback period. For EZ filers only, the lookback period is now January 1–March 31, 2020.
 

As Always, Allevity is Here to Help

Recent legislation is daunting. If you have questions, we’re ready to help you find answers. Give us a call at (800) 447-8233 and let’s chat. Or, if you prefer we reach out to you by email, click here.

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