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Coronavirus Help Center - May 22: The latest government update loan forgiveness is here.
iMay 22 loan forgiveness update

Late Friday, May 22 the U.S. Treasury and the Small Business Administration issued two Interim Final Rules: the highly anticipated Interim Final Rule on Loan Forgiveness, and an Interim Final Rule on Loan Review Procedures and Related Borrower Responsibilities. We are working through the new guidance to finalize our reporting, loan forgiveness estimations, and will produce additional content and resources to help you as you seek loan forgiveness.

For additional information on maximizing loan forgiveness, please visit our FAQs.

Paycheck Protection Program (PPP) Loan Forgiveness Estimator

Whether you have recently received your Small Business Administration (SBA) loan through the Paycheck Protection Program (PPP), or are hoping to apply in the future, estimating your PPP loan forgiveness amount is based on many factors. We have created a PPP Loan Forgiveness Estimator to assist you with understanding how much of your PPP loan may be forgiven by the federal government. To learn more, visit our Paycheck Protection Program resource.

FAQs About the PPP Loan Forgiveness

For additional details around eligible PPP loan expenses and the repayment forgiveness program, please refer to these FAQs.

Information provided is current as of the date published and is subject to change based on additional guidance.

What is the Paycheck Protection Program

The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) temporarily added a new program, titled the Paycheck Protection Program (PPP), to the SBA’s 7(a) Loan Program.  The PPP was intended to provide economic relief to small businesses nationwide adversely impacted by the COVID-19.

The CARES Act provides that, subject to several important limitations, borrowers shall be eligible for forgiveness of their PPP loan in an amount equal to the sum of their covered costs (payroll and non-payroll) incurred and payments made during the covered period. 

Paycheck Protection Program loan

What is the purpose of a PPP loan?

The PPP is intended to help business owners keep their employees on the payroll, return those who might have been furloughed, and keep their business open by offering loans that are forgivable for funds used on covered costs.

What is the covered period? Is there more than one covered period I can elect?

The eight-week (56 day) period in which your loan is to be used. The Loan Forgiveness Application and related guidance describe two possible eight-week periods, a Standard Covered Period that begins on the date you receive your loan proceeds and an Alternative Covered Period that begins on the first day of their first pay period following receipt of your loan. Only borrowers with a bi-weekly or more frequent payroll frequency can elect to use the Alternative Covered Period. Unless otherwise indicated in these FAQs, the term covered period or chosen covered period refers to the covered period you elect. 

Only eligible payroll and non-payroll costs paid or incurred during the covered period are eligible for forgiveness

What are covered costs under PPP?

Covered costs include eligible payroll and non-payroll (business payments for mortgage interest, rent and utilities) costs paid or incurred during an eight-week covered period.

What are payroll costs?

Borrowers are generally eligible for forgiveness for the payroll costs (also referred to in the Loan Forgiveness Application as Eligible Payroll Costs) paid and incurred during their covered period. Payroll costs consist of:

  • Cash Compensation. The sum of gross salary, wages, tips, and commissions, paid leave (vacation, family, medical or sick leave, not including leave covered by the Families First Coronavirus Response Act), and allowances for dismissal or separation paid or incurred during your chosen covered period. For each employee, the total cash compensation eligible for forgiveness may not exceed an annual salary of $100,000, as prorated during your chosen covered period
  • Employer Paid Benefits. Payment for the provision of group health care coverage, including insurance premiums, and retirement
  • Employer Paid State and Local Taxes. Payment of state and local taxes assessed on compensation of employees
  • For an independent contractor or sole proprietor, wages, commissions, income, or net earnings from self-employment, or similar compensation.

Payroll costs are considered paid on the day that paychecks are distributed, or the borrower originates an ACH credit transaction. Payroll costs are considered incurred on the day that the employee’s pay is earned. Payroll costs incurred but not paid during the Borrower’s last pay period of their covered period are eligible for forgiveness if paid on or before the next regular payroll date. Otherwise, payroll costs must be paid during their covered period. You may only count payroll costs that were both paid and incurred once.

What are non-payroll costs?

Non-payroll costs eligible for forgiveness consist of:

  • Business mortgage interest payments. Payments of interest (not including any prepayment or payment of principal) on any business mortgage obligation on real or personal property incurred before Feb. 15, 2020
  • Business rent or lease payments. Business rent or lease payments pursuant to lease agreements for real or personal property in force before Feb. 15, 2020
  • Business utility payments. Business payments for a service for the distribution of electricity, gas, water, transportation, telephone, or internet access for which service began before Feb. 15, 2020.

An eligible nonpayroll cost must be paid during the Covered Period or incurred during the Covered Period and paid on or before the next regular billing date, even if the billing date is after the Covered Period. Eligible nonpayroll costs cannot exceed 25% of the total forgiveness amount. Count nonpayroll costs that were both paid and incurred only once.

When do I need to start paying my employees for loan forgiveness?

Only eligible payroll costs earned during the eight-week (56-day) period following receipt of the loan proceeds are eligible for forgiveness. There are two possible start dates to the eight-week period. The Covered Period, available to all borrowers, begins when they receive the loan amount. The Alternative Covered Period, introduced in the Loan Forgiveness Application (released May 15, 2020), is only for borrowers with a bi-weekly or more frequent payroll frequency. The Alternative Covered Period begins on the first day of the first pay period following their PPP loan disbursement date.

Does the EIDL loan/grant work in conjunction with the PPP loan?

Any advance received for the EIDL program under the CARES Act reduces your loan forgiveness by the amount of the advance.

Will there be interest on my PPP loan?

The remainder of the PPP funds that are not forgiven will become a loan with interest capped at 1%, but payments of loan principle may be deferred up to six months.

Loan forgiveness process

What will need to be submitted for loan forgiveness?

To apply for forgiveness of your PPP loan, you will need to complete the PPP Loan Forgiveness Application (LFA) and submit it to your lender that issued or is servicing your loan to obtain forgiveness. Some lenders may allow you to prepare and submit the application electronically so be sure to check with your lender.   

The application has the following components: (1) the PPP Loan Forgiveness Calculation Form; (2) PPP Schedule A (Sch. A); (3) the PPP Schedule A Worksheet (Sch. A Worksheet or Worksheet); and (4) the (optional) PPP Borrower Demographic Information Form. All Borrowers must submit (1) and (2) to their lender.

You will also need to provide support for your payroll and non-payroll costs, full time equivalent (FTE) employee counts. See Loan Forgiveness Application Guide for complete details on how to complete the Loan Forgiveness Application along with what you will need to submit. 

Who do I submit my loan forgiveness documentation to?

A request can be made to the lender servicing the loan. 

How long will it take to know if the loan is forgiven?

Lender must make decision on forgiveness within 60 days. Loan payments will be deferred for a minimum of six months in the event you do have to pay on the loan, interest will accrue during this time.

What if expenses turn out to be lower than the amount of the loan?

Any amount of the loan that is not forgiven must be repaid at 1% interest rate over two years. There are no prepayment penalties.

What other factors affect my PPP loan forgiveness amount?

Your loan forgiveness amount will also be further reduced if you (1) fail to maintain the same number of full-time equivalent (FTE) employees during the covered period compared to a defined look-back period (the FTE Reduction adjustment); and/or (2) decrease wages for employees earning less than $100,000 (annualized) by more than 25% when compared to the employee’s average weekly wages during the 1st Quarter 2020 (the Salary/Wage Reduction Adjustment 

If you restore FTEs or wages by June 30, 2020 you may be eligible for the FTE and/or Wage Reduction Safe Harbors. Your loan forgiveness amount may also be reduced if you do not spend at least 75% of our loan forgiveness amount on payroll costs. No more than 25% of the loan forgiveness amount can be attributable to non-payroll costs.

Can I change my check dates to maximize forgiveness?

We would not recommend changing your normal payroll schedule. You are still required to follow wage and hour laws in your state. Without final guidance, this may not result in the desired outcome.

Can I pay people additional advances or bonuses to maximize my forgiveness?

There is no guidance available on if paying additional wages will be allowed for forgiveness. Normal payroll procedures should be followed; all loan forgiveness could be subject to an audit.

Is there a deadline that I must have all my employees back to work and a certain number of days or weeks from this time that that they must be employed for the loan amount to be forgiven?

The sooner you return your employees to work and restore wages during your covered period the less your loan may be reduced based on FTE or wage reduction. Employees must be returned to work and wages restored not later June 30, 2020 to qualify for either the FTE or wage reduction safe harbors.

Here is some useful information to consider. Based on the Loan Forgiveness Application the eight-week (56-day) Covered Period begins on the date you received the loan amount and the Alternative Covered Period begins on the first day of the first pay period following receipt of the loan amount. Only borrowers with a payroll frequency of bi-weekly or more frequent can use the Alternative Covered Period. Only eligible payroll and non-payroll costs paid or incurred during your covered period are eligible for forgiveness.

Forgiveness is based on the employer maintaining or quickly re-hiring employees and maintaining wages paid. Forgiveness may be reduced if the number of FTEs declines, or if salaries and wages decrease during the Covered Period or Alternative Covered Period. If FTEs and/or wages paid decline, you may owe some money back. However, you may be able to qualify for an FTE reduction safe harbor and/or a salary/hourly wage safe harbor if you meet certain criteria and take certain actions by June 30, 2020.

FTE Reduction Safe Harbor. The borrower is exempt from the reduction in loan forgiveness based on FTE employees described above if both following conditions are met: (1) the borrower reduced its FTE employee levels in the period beginning Feb. 15, 2020, and ending April 26, 2020; and (2) the borrower then restored its FTE employee levels by not later than June 30, 2020 to its FTE employee levels in the borrower’s pay period that included Feb. 15, 2020

Salary/Hourly Wage Safe Harbor. If you reduced wages between Feb. 15 and April 26 you may be eligible for the Safe Harbor if you fully restore the annual salary and hourly wages to at least the annual salary and hourly wages existing on Feb. 15, 2020.

Does it matter when I pay my employees or when their wages are earned? How will forgiveness be impacted if I get my loan in the middle of a pay period?

Yes. Based on current guidance, only eligible payroll costs earned during your covered period are eligible for forgiveness. Based on the Loan Forgiveness Application the eight-week (56-day) Covered Period begins on the date you received the loan amount and the Alternative Covered Period begins on the first day of the first pay period following receipt of the loan amount. Only borrowers with a payroll frequency of bi-weekly or more frequent can use the Alternative Covered Period. Because your loan forgiveness amount may be reduced if 75% of your costs do not consist of payroll costs the sooner you rehire and restore any wage reductions the more of your loan amount may be forgiven.

What PPP Loan Forgiveness reporting will Paychex provide if I started with you in 2019?

Clients will receive both Loan Forgiveness Report/Worksheet and be able to use the Loan Forgiveness Estimator in Paychex Flex®. If Paychex does not have  per pay period historical information, the estimator will not be able to identify an employee who received, during any single pay period of 2019, their wages or salary at an annualized rate of pay in an amount of $100,000 or more. These employees should be excluded from the wage reduction portion of the calculation.

To address this, a worksheet will be provided as part of the Loan Forgiveness reports that show by employee, if they made more than $100,000 and should be excluded, and if not, what the amount of the reduction is. Employers will need to use this worksheet to adjust their forgiveness calculation as needed.

How soon do I have to apply for forgiveness after the 8 weeks are over?

Payments on the principle of the loan amount are deferred for 6 months, interest (1%) begins immediately. You can prepay your loan amount without penalty. Based on current guidance  you are not required to apply immediately after your covered period end, although once the deferment ends you will need to begin payments on any remaining principle amounts. Please remember, principal payments are deferred for six (6) months. This time does include the covered period.

What is the general process to obtain loan forgiveness?

The general loan forgiveness process described below applies only to loan forgiveness applications that are not reviewed by SBA prior to the lender’s decision on the forgiveness application. In a separate interim final rule on SBA Loan Review Procedures and Related Borrower and Lender Responsibilities, SBA will describe its procedures for reviewing PPP loan applications and loan forgiveness applications.

  • Borrower. To receive loan forgiveness, a borrower must complete and submit the Loan Forgiveness Application (SBA Form 3508 or lender equivalent) to its lender (or the lender servicing its loan). See below for how to complete your Loan Forgiveness Application. 
  • Lender Review
    • As a general matter, the lender will review the application and make a decision regarding loan forgiveness. The lender has 60 days from receipt of a complete application to issue a decision to SBA.
    • If the lender determines that the borrower is entitled to forgiveness of some or all of the amount applied for under the statute and applicable regulations, the lender must request payment from SBA at the time the lender issues its decision to SBA.
  • SBA Review
    • SBA will, subject to any SBA review of the loan or loan application, remit the appropriate forgiveness amount to the lender, plus any interest accrued through the date of payment, not later than 90 days after the lender issues its decision to SBA.
    • If applicable, SBA will deduct EIDL Advance Amounts from the forgiveness amount remitted to the lender as required by section 1110(e)(6) of the CARES Act.
    • If SBA determines in the course of its review that the borrower was ineligible for the PPP loan based on the provisions of the CARES Act, SBA rules or guidance available at the time of the borrower’s loan application, or the terms of the borrower’s PPP loan application (for example, because the borrower lacked an adequate basis for the certifications that it made in its PPP loan application), the loan will not be eligible for loan forgiveness.
  • Forgiveness and Repayment
    • The lender is responsible for notifying the borrower of the forgiveness amount.
    • If only a portion of the loan is forgiven, or if the forgiveness request is denied, any remaining balance due on the loan must be repaid by the borrower on or before the two-year maturity of the loan.
    • If the amount remitted by SBA to the lender exceeds the remaining principal balance of the PPP loan (because the borrower made scheduled payments on the loan after the initial deferment period), the lender must remit the excess amount, including accrued interest, to the borrower.

Estimating PPP Loan Forgiveness

What are eligible covered expenses when estimating how much of my PPP loan will be forgiven?

  • Payroll costs (including employer paid employee benefits and employer paid state and local taxes)
  • Non-Payroll Costs
    • Interest payments on any covered mortgage obligation incurred before Feb. 15, 2020
    • Payment of rent under a lease in force prior to Feb. 15, 2020
    • Utility payments for which service began before Feb. 15, 2020

How do you calculate payroll costs for Paycheck Protection Program loans?

Your payroll costs are the sum of the compensation, employer paid benefits, and employer assessed state and local taxes. To calculate your payroll costs for PPP loan forgiveness during your 8-week covered period (either the standard Covered Period or the Alternative Covered Period) you must follow the steps below:

  • Calculate the eligible compensation (capped at $100,000 per year annualized) for your employees during the covered period.  Compensation includes salary, vacation, leave (sick, parental, family, and medical), severance pay, wages, commissions or similar compensation, and cash tips.
  • Apply the $100,000 salary cap for highly compensated employees and sole proprietors
  • Add Employer paid benefit costs. Include payment for: Group health care benefits, including insurance premiums, and retirement during the covered period.  
  • Add Employer paid state and local taxes on the eligible compensation.

Is FUTA included in my PPP loan forgiveness estimations?

The Federal Unemployment Tax (FUTA) is not included in the PPP loan calculation.

How does the 75% toward payroll impact my forgiveness?

Your forgiveness amount may be adjusted so that 75% of your forgiveness is equal to what you paid in payroll costs (payroll costs / .75). Payroll costs consist of eligible wages, ER healthcare contributions, ER Retirement contributions, and ER-paid state and local taxes.

What things can impact my forgiveness?

Generally, there are three areas that may lead to a reduction in your forgiveness amount. First, your loan forgiveness amount will be adjusted if you reduced FTEs or wages during your covered period and you did not restore those FTEs or wages by June 30,2020. Next, at least 75% of your loan forgiveness amount must be attributable to your payroll cost (put another way, no more than 25% of your loan forgiveness amount may be attributable to non-payroll costs. Finally, if you received an EIDL Advance, the SBA will reduce your loan forgiveness by the amount of the advance. You can use the Loan Forgiveness Estimator on paychex.com to estimate the amount of your loan that will be eligible for forgiveness and, very soon, a Loan Forgiveness Estimator located in Paychex Flex®.

If I have an employee who makes over $100,000 annually, how does that impact my loan forgiveness?

Employees who made over $100,000 annualized for any pay period in 2019 are removed from the loan forgiveness wage reduction calculation. Wages included in Payroll Costs during the covered period are capped at $15,385 per employee.

How will I figure out who would have been over the $100,000 threshold last year if I didn’t process with Paychex all year? And if wages were loaded in lump sum?

Paychex will use information from payrolls we processed as well as the historical data provided at onboarding. The PPP Report identified any month where Paychex did not process the payroll and estimated when wages were earned based on the totals provided to Paychex during onboarding. Since Paychex is estimating when wages were earned for months not processed at Paychex, we may not correctly identify employees who made over $100,000 annualized for any pay period in 2019 to remove them from the loan forgiveness wage reduction calculation.

A worksheet will be provided as part of the Loan Forgiveness reports that show by employee, if they made more than $100,000 and should be excluded, and if not, what the amount of the reduction is. Employers will need to use this worksheet to adjust the forgiveness calculation as needed.

Does hazard pay get included in the 75%?

Hazard pay is included in the 75% payroll costs calculation and is subject to all the same wage rules.

Can I pay my employee’s retroactively to make up the 75%?

There is no guidance available on if paying retroactive wages will be allowed for forgiveness. Normal payroll procedures should be followed; all loan forgiveness could be subject to an audit.

Can I pay my employee’s in advance to make up the 75%?

No. Payroll costs must be paid or incurred during the Covered or Alternative Covered Period. If incurred during the last period of your covered period, the payroll costs must be paid on or before the next regularly scheduled payroll date. 

What wages are counted in the 8 weeks? Wages earned or paid?

Based on guidance the wages that can be included in Payroll Cost must be paid or earned during the Covered or the Alternative Covered Period.

What, if any, are the limits to what can be forgiven?

Forgiveness cannot exceed the principal amount of the loan, and only eligible expenses during the eight-week period following loan disbursement are eligible. Since the purpose of the program is to keep employees on the payroll, not more than 25% of loan forgiveness amounts may be used for non-payroll costs.

Can anything reduce the loan forgiveness amount?

Yes. Your eligible forgiveness amount is subject to reduction based on a reduction in number of full-time employees (FTE) and/or reduction in amount of salary or wages for those employees by more than 25%. Regarding the reduction of salary/wages, it cannot exceed 25% of the total salary or wages of the employee during the most recent full quarter during which the employee was employed before the eight-week period.

Will my entire PPP loan principal be forgiven immediately?

The amount of your loan can only be forgiven up to the sum of the eligible covered expenses (listed above) during an eight-week period beginning on the date of receipt of the loan proceeds from the lender (the “covered period”). Loans will not automatically be forgiven. There is a loan forgiveness application process.

How much of a PPP loan can be forgiven?

The full principal amount and any accrued interest can be forgiven for funds used to pay for covered costs during an eight-week period following loan disbursement.

How can I maximize the amount of the PPP loan forgiveness I receive?

To maximize forgiveness, you must use at least 75% of the loan amount for payroll costs and not more than 25% of the loan forgiveness amount may be non-payroll costs.

Will the number of FTEs retained/rehired impact loan forgiveness?

Yes. Your loan forgiveness amount will be impacted based on a comparison of the average number of FTEs during the covered period with one of two comparison periods. If you reduced FTEs your loan forgiveness amount may be reduced. If you restore FTEs not later than June 30, 2020 you may qualify for the FTE Reduction Safe Harbor. 

What are the full-time equivalency (FTE) calculations used to determine reduction of loan forgiveness eligibility?

If an employer reduces the number of FTEs during the covered period, then the amount of loan forgiveness eligibility will be reduced proportionately. The following formulas will be used based on reductions in the number of FTEs:    

  • Average number of FTEs per month* employed by the borrower during the covered period divided by either the:                 
    • Average number of FTEs/month employed by the borrower from Feb. 15, 2019 to June 30, 2019, or       
    • Average number of FTEs/month employed by the borrower from Jan. 1, 2020 to February 29, 2020  

 * The average number of FTEs is determined by calculating the average number of FTEs for each pay period falling within a month.

Full-time employees (FTE)

How do I determine whether I will have an FTE Reduction adjustment?

First, determine your Average FTEs during your chosen covered period and the defined look-back period (referred to in the Loan Forgiveness Application as the Chosen Reference Period). Your Chosen Reference Period, is, at your election, either (i) Feb. 15, 2019 to June 30, 2019; (ii) Jan. 1, 2020 to Feb. 29, 2020; or (iii) in the case of seasonal employers, either of the preceding periods or a consecutive twelve-week period between May 1, 2019 and Sept. 15, 2019. 

Next, sum the aggregate total of FTE employees for both the Chosen Reference Period and your chosen covered period, by adding together all of the employee-level FTE employee calculations. You then divide the average FTE employees during your chosen covered period by the average FTE employees during your Chosen Reference Period, the result is the FTE Reduction Quotient. You may be exempt from this reduction if you restore FTEs by June 30, 2020.

How do I calculate average FTEs?

Borrowers must divide the average number of hours paid for each employee per week by 40, capping this quotient at 1.0. For employees who were paid for less than 40 hours per week, borrowers may choose to calculate the full-time equivalency in one of two ways.

  • First, the borrower may calculate the average number of hours a part-time employee was paid per week during the covered period. For example, if an employee was paid for 30 hours per week on average during the covered period, the employee could be considered to be an FTE employee of 0.75. Similarly, if an employee was paid for ten hours per week on average during the covered period, the employee could be considered to be an FTE employee of 0.25.
  • Second, for administrative convenience, borrowers may elect to use a full-time equivalency of 0.5 for each part-time employee.

Borrowers may select only one of these two methods and must apply that method consistently to all of their part-time employees for the covered period or the alternative payroll covered period and the selected reference period.

How do I qualify for the FTE Reduction Safe Harbor?

You will be exempt from the reduction in loan forgiveness based on FTE employees described above if both of the following conditions are met: (1) the borrower reduced its FTE employee levels in the period beginning Feb. 15, 2020, and ending April 26, 2020; and (2) the Borrower then restored its FTE employee levels by not later than June 30, 2020 to its FTE employee levels in the Borrower’s pay period that included Feb. 15, 2020.

What if I make an offer to re-hire and the employee refuses?

You will be eligible for an FTE Reduction Exception and your forgiveness amount will not be reduced if you laid-off or reduced the hours of an employee, then offered to rehire the same employee for the same salary and same number of hours, or restore the reduction in hours, but the employee declined the offer.  Specifically, in calculating the loan forgiveness amount, you may exclude any reduction in full-time equivalent employee headcount that is attributable to an individual employee if:

  • You made a good faith, written offer to rehire such employee (or, if applicable, restore the reduced hours of such employee) during the covered period or the alternative payroll covered period;
  • the offer was for the same salary or wages and same number of hours as earned by such employee in the last pay period prior to the separation or reduction in hours;
  • the offer was rejected by such employee;
  • you have maintained records documenting the offer and its rejection; and
  • you have informed the applicable state unemployment insurance office of such employee’s rejected offer of reemployment within 30 days of the employee’s rejection of the offer.

What if an employee is fired for cause, voluntarily resigns, or voluntarily requests a schedule reduction?

You will be eligible for an FTE Reduction Exception and your forgiveness amount will not be reduced if an employee of the borrower is fired for cause, voluntarily resigns, or voluntarily requests a reduced schedule during your chosen covered period .

How do I determine whether I will have a salary or hourly wage reduction adjustment?

Your loan forgiveness amount may be less, depending on whether the salary or hourly wages of certain employees during your covered period was less than during the period from January 1, 2020 to March 31, 2020. To calculate whether a Wage Reduction is required you will calculate the wage reduction for each FTE employed during the covered period who either was hired in 2020 OR received less than $100,000 on an annualized basis during any pay period in 2019. You may be exempt from this reduction if you fully restore wages by June 30, 2020.

How do I determine if I qualify for the salary or hourly wage reduction safe harbor?

If a borrower restores reductions made to employee salaries and wages or FTE employees by not later than June 30, 2020, the borrower can avoid a reduction in its loan forgiveness amount. If certain employee salaries and wages were reduced between February 15, 2020 and April 26, 2020 (the safe harbor period) but the borrower eliminates those reductions by June 30, 2020 or earlier, the borrower is exempt from any reduction in loan forgiveness amount that would otherwise be required due to reductions in salaries and wages under section 1106(d)(3) of the CARES Act.

What if I only bring back part of my work force?

Your forgiveness will be reduced proportionately to your Full-time Equivalent (FTE) reduction.

PPP Loan Repayment

My PPP loan was deposited in my account. Do I only have 8 weeks from this date to use the money?

Based on the Loan Forgiveness Application the eight-week (56-day) Covered Period begins on the date you received the loan amount and the Alternative Covered Period begins on the first day of the first pay period following your PPP Loan Disbursement Date. Only borrowers with a payroll frequency of bi-weekly or more frequent can use the Alternative Covered Period.

What if I can only use a portion of my loan amount? Can I pay back my loan without penalty or interest?

Payments on the principal of the loan amount are deferred for 6 months. You can prepay your loan amount without penalty. Any amount not forgiven will roll into a loan at 1% interest for a two-year term.

What happens if my loan isn’t forgiven?

Any amounts not forgiven must be paid back over a two-year term. The interest on your loan is capped at 1% and the CARES Act provides the borrower with a six-month deferment of payments. Interest will continue to accrue.

What reports can I use today while I wait for PPP Forgiveness specific reporting?

While we wait for final guidance from the SBA, Paychex has created a Loan Forgiveness Estimator located on paychex.com where clients can enter payroll and non-payroll information to get an estimate on their Loan Forgiveness.Payroll Journals and Cash Requirements can assist with the payroll costs entered on the Loan Forgiveness Estimator.  We will also release an updated Loan Forgiveness Estimator in Paychex Flex® that pre-populates client payroll information by the end of May.

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