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The Paycheck Protection Program (PPP) was created to help keep small businesses afloat and their employees paid while they weather the Covid-19 pandemic. The U.S. government has provided two rounds of PPP loans, one in March 2020 under the CARES Act (PPP1) and one in December 2020 under the ECRA (PPP2), with similar forgiveness terms. The rules around PPP loan forgiveness for PPP1 and PPP2 are outlined below as they are updated by Congress, the U.S. Department of Treasury and the Small Business Administration.
Importantly, qualified portions of PPP1 and PPP2 loans may be forgiven if borrowers use the loans for the following purposes over the 8 or 24 week period (at borrower's option) after the loan is made, or the "alternative covered period" for payroll expenses beginning with the next payroll period as described below, and employee and compensation levels are maintained as they were prior to the coronavirus:
鈼忊赌侾ayroll costs for those whose primary residence is the United States鈼忊赌侻ost mortgage interest and rent鈼忊赌俇tility costs鈼忊赌侰ertain operating, supplier, repair and employee protection costs
For loans less that $150,000, with the passage of the ECRA in December 2020, the government has provided an expedited, one page loan forgiveness application.
The ECRA also eliminated the reduction of PPP loan forgiveness for any EIDL grants or loans.
Further details of PPP forgiveness are as follows:
PPP Forgiveness Information
Emergency Relief Services
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