|Banks are currently opening the forgiveness application portal for anyone who received the PPP 2 Loan. At this point, we recommend the following:
2. If you plan to submit yourself, please remember the following:
a. You will cap owners at $20,833.00 and employees at $46,154.00 in gross wages when determining total payroll wages paid for during the covered period. Also, remember to subtract out any FFCRA wages or Employee Retention Credit (ERC) wages (see #4 below).
i. We recommend you use wages to simplify the application, assuming you have enough to cover the entire PPP proceeds you received.
ii. PPP proceeds need to have at least 60% used on payroll costs. This includes the following: wages, state employer tax, retirement match, and health insurance.
b. You will want to keep any reports you use on this calculation and a copy of your forgiveness application filed for four years.
i. Please contact us if you need further guidance on the back-up needed depending on what you use for the PPP forgiveness application.
c. If you have not already submitted the application, you will be required to give the bank a copy of your Profit and Loss report showing you had at least a 25 percent reduction of gross receipts in one of the quarters in 2020 compared to the same quarter in 2019.
d. If your PPP loan is over 150K, you will be required to submit your workpapers to the bank.
3. If you plan to have Fluence help with your forgiveness application submission, please let us know so we can add you to our tracking schedule.
a. We will not start this process until the midpart or end of August when most of our clients’ covered periods are over.
b. We will give you instructions to submit this to your bank, a copy of the application with final numbers to use, and workpapers you will keep for four years and/or submit to the bank if your loan is over 150K.
4. Employee Retention Credit (ERC) for 2021 – If your gross receipts (collections) are down 20% or more in any quarter in 2021 compared to where it was in 2019, you will qualify for a 2021 ERC. It is important you reach out to us before you submit for your PPP 2 forgiveness application.
a. If you are eligible for this credit, you will not want to use any wages for the ERC that you use for the PPP forgiveness application.
b. This may mean you will need to use non-payroll costs to maximize both the ERC and the PPP forgiveness. Again, payroll costs need to be at least 60% of the PPP loan proceeds used.
c. Fluence will be reviewing if any of our clients are eligible for this credit and will let you know.