Paycheck Protection Program Loan Forgiveness Documents Checklist
Until we are provided clear guidance from the SBA, we recommend you start documenting how all loan proceeds were spent:
- List of all employees on payroll during the prescribed time period for forgiveness with the dollar amount of payroll costs (defined below).
- Evidence of mortgage interest payments, rent payments and utilities paid during the prescribed time period for forgiveness:
- Copies of cancelled checks
- Bank statements with ACH info
- Utility bills
- Mortgage statements
- Lease agreement
- Evidence that workers were kept on payroll or rehired once loan was received, including a calculation of the average monthly number of full-time equivalent employees for the period February 15, 2019 through June 30, 2019 or January 1, 2020 through February 29, 2020 (borrower to select the time period) and the average monthly number of full-time equivalent employees for the period of (borrower to select one) for the 24 weeks following the date of the loan.
- Evidence of restoration by December 31, 2020 of pay for any individual whose pay was reduced by 25% or more.
- Evidence of payroll costs, utilities, rent/lease payments and mortgage interest paid before February 15, 2020 to compare to what is paid or incurred during the 24 weeks following the loan closing to ensure it aligns. If self-employed, these expenses are allowed to the extent they are deductible on Form 1040 Schedule C.
- Evidence you were in business on February 15, 2020 and paid employees or independent contractors (Payroll Tax Filing for 1st quarter 2020)
- For borrowers who are self-employed, the forgiveness amount for owner’s compensation excludes any qualified sick leave equivalent amount for which a credit is claimed under section 7002 of the Families First Coronavirus Response Act (FFCRA) (Public Law 116-127) or qualified family leave equivalent amount for which a tax credit is claimed under section 7004 of FFCRA (similar rule as applies to employers with respect to pay for time for which a tax credit is claimed under FFCRA).
- If you use PPP funds for unauthorized purposes, SBA will direct you to repay those amounts. If you knowingly use the funds for unauthorized purposes, you may be subject to additional liability such as charges for fraud. If one of your shareholders, members, or partners uses PPP funds for unauthorized purposes, SBA will have recourse against the shareholder, member, or partner for the unauthorized use.
- Copy of EIDL loan if refinanced with PPP loan (be sure to identify how much was an advance that does not have to be repaid).