PPP Loan Forgiveness Application Form 3508S

PPP LOAN FORGIVENESS APPLICATION FORM 3508S INSTRUCTIONS FOR BORROWERS

Step by step instructions on how to complete the NEW PPP loan forgiveness application form 3508S for self-employed, independent contractors, sole proprietors, or single-member LLC.
PPP FORGIVENESS APPLICATION FORM 3508S: https://www.sba.gov/sites/default/fil…NAICS CODE WEBSITE: https://www.naics.com/search/

DISCLAIMER This video is intended for educational purposes and should not be taken as legal or tax advice. You should consult with your financial professionals about your unique financial situation before acting on anything discussed in these videos. Freedomtax Accounting and Multiservices Inc. is providing educational content to help small business owners become more aware of certain issues and topics, but we cannot give blanket advice to a broad audience. Freedomtax Accounting and Multiservices Inc. or its members cannot be held liable for any use or misuse of this content.

 

PPP LOAN FORGIVENESS APPLICATION FORM 3508S INSTRUCTIONS FOR BORROWERS

You (the Borrower) can apply for forgiveness of your First or Second Draw Paycheck Protection Program (PPP) Loan using this Form 3508S only if the loan amount you received from your Lender was $150,000 or less for an individual First or Second Draw PPP Loan. If you are not eligible to use this form, you must apply for forgiveness of your PPP loan using SBA Form 3508or 3508EZ (or lender’s equivalent form). Each PPP loan must use a separate loan forgiveness application form. You cannot use one form to apply for forgiveness of both a First and Second Draw PPP loan. SBA Form 3508S requires fewer calculations and less documentation for eligible borrowers.

SBA Form 3508S does not require borrowers to show the calculations used to determine their loan forgiveness amount. However, SBA may request information and documents to review those calculations as part of its loan review or audit processes. Complete this SBA Form 3508S in accordance with the instructions below, and submit it to your Lender (or the Lender that is servicing your loan). Borrowers may also complete this application electronically through their Lender.

If this application is being submitted for a First Draw PPP Loan approved on or before August 8, 2020 and the Borrower is required to submit an SBA Form 3508D disclosure of a controlling interest, that disclosure must be submitted to the lender not later than 30 days after submission of this loan forgiveness application. See subsection B.16 of SBA’s interim final rule posted on January 6, 2021 (86 FR 3692).

If this loan forgiveness application is being submitted for a Second Draw PPP Loan, the Borrower must submit simultaneously to its lender documentation supporting the gross receipts reduction certification on the Borrower’s loan application (if the Borrower did not previously submit such documentation to the lender.

 

Video Transcript

Hello from FreedomTax Accounting. We’re an accounting firm where we have been providing quality tax and accounting services now for over 20 years. And finally, after weeks and weeks of waiting, thE SBA has finally released the final simplified, PPP forgiveness form that if you’re self-employed, this is the PPP forgiveness form that you need to fill out.

Now, we are recording this video on January 28th. We always emphasize the date on the recording on any video relating to the PPP program because this program is constantly changing. So that’s the importance of subscribing to our channel. So you’re always up to date with the most current and accurate information regarding the PPP and the idle loan programs.

Now we do feel that less changes will come, this should be the last update to this PPP forgiveness form. This form has gone through many changes for the last couple of months so this should be the final version of the PPP forgiveness form. If you’re self-employed, this is the one you need to fill out and in this video, we’re going to take you on a step by step instructional video on how to fill out this application. So you get a hundred percent forgiveness of your PPP loan.

This video is for businesses or self-employed that got a PPP loan? That’s $150,000 or less.

PPP Loan Forgiveness Application Form 3508S

One of the most common questions we get in our office is, is there going to be automatic forgiveness? The answer is no. There was an idea.

The last couple of months and Congress was debating it, if there should be automatic forgiveness for PPP loans under $150,000, but that did not go through.

So there is no automatic forgiveness. If you got a PPP loan, $150,000 or less. You have to fill out this form, which is the form 3508S, the updated version of this form, but they did their best to do the next best thing to automatic forgiveness. Because this application you’re going to see is very easy, it’s a one-page form. You don’t have to send in any documentation. So is the closest thing to automatic forgiveness.

This is for self-employed independent contractors, sole proprietorships or single members, LLC, who got PPP one and they filed their 2019 business taxes under schedule C and you use your 2019 schedule C to file for PPP one.

And that you did not have employees on payroll. Okay. Remember employees in payroll means people. Yeah. You pay as employees from your business that you give them a W2 at the end of the year, independent contractors that you pay and you give them 1099 at the end of the year are not employees. They’re not in payroll.

So if you’re a self-employed independent contractor, sole proprietor, single-member LLC, and you don’t have employees on payroll. This is the forgiveness form that you need to fill out and we’re going to go step by, step on how to fill it out.

Where do you get the form?

You get the form here

So once again, the form details that this is for PPP loans that are $150,000 or less here.

  • You put your business legal name. If you are a self-employed independent contractor and you are not working under an LLC, then you will put your personal name.
  • If you are working under an LLC here, you will put the LLC name,
  • If your business has a DBA here, you put your business address.

Once again, if you don’t have an LLC, then you just put your personal address or the address that’s on the schedule seat. So if take a look at your 2019 schedule C, because this is where you report it, your business income and here, where it says here, business address.

In the NAICS code. This is where a lot of people have a lot of questions. Every industry has its own code. Where do you find this number? Where you have two choices?

You can once again, go to your schedule, on box B where it says enter code from instructions. There is a six digit code. So that’s your industry code now on, unfortunately, there are a lot of tax preparers that skipped this part. And only put here like 99999, but that’s that won’t fly with SBA. So if you see here 99999 means that your tax professional did not do this correctly. And in that case, you’re going to have to go to the following websites.

Here it says NAICS code search. You click that and here where it says NAICS search here. Now for example, if you are a real estate agent, you put real estate agent click search and see here where it says setting real estate agents.

PPP Loan Forgiveness Application Form 3508S

So this number here is your NAICS code. Okay, so here you put your industry or what do you do? Click search and look for the code that best describes your business.

Then we go to the business tax identification number. If you work under an LLC here, you add your EIN number.

If you’re not working under the LLC here, you put your:

  • Social security number
  • Business phone
  • Name
  • Email

Let’s go down then. Here we click first draw. Okay, because you’re asking for forgiveness for the first PPP. Apparently, you’re going to have to use this same form if you apply for the second PPP loan here.

Here you put your SBA PPP loan number and the lender PPP loan number this you get from the bank that gave you.

PPP Loan Forgiveness Application Form 3508S

When you signed the PPP loan documents, this is a document that you got, it says the SBA note in assess your SBA loan number.

Here you put the amount that was positive to your account. The amount of PPP loan the bank gave you here, you put the date. That the PPP funds work the positive into your account here, employees at the time of application. If you’re a self-employed independent contractor, single-member, LLC, that’s SBA States that here you put 1 and here you put 1.

The cover period is the date here, you put the date that you received the PPP funds and then

Two, you just put here the date that’s 24 weeks after the first date from, from the date that you got the funds, you put that date here and then count 24 weeks forward and that 24 weeks date, you put it in this line.

If you got a PPP loan, that’s $2 million or more. Now here. It says the amount of loan spent on payroll costs. Okay. Now, this is where a lot of people get confused because you’re basically self-employed and you don’t have payroll, but what you need to do is go again to your Schedule C. You go to the schedule C that you use to fill out your 2019 schedule C, which you use to fill out your PPP one, you scroll down to line 31, the number that’s here, you divide by 12 and you multiply by 2.5. For

For example, if here it’s $60,000. Let’s say a “Line 31” says $60,000. You take $60,000 divide by 12 and multiply by 2.5. That’s 12,500, so that’s the number that you’re going to put in this line on the amount of loan spent on payroll costs.

Now, if, if your line 31 has over a hundred thousand dollars, let’s say that he says $110,000, you only do this formula with a $100,000. A 100,000 is the max, so you do that math and you put that number here.

On loan amount spent on requested loan forgiveness, it’s the same number. It’s line 31 divided by 12 multiplied by 2.5. That’s the forgiveness amount that you are eligible to get.

If the loan amount that you received is higher than their requested forgiveness amount. That means that you received PPP funds that you receive more than you should have. So whatever you don’t get forgiven, you have to pay it back or it becomes a loan with the bank.

Once you do this, then you basically have to put your initials.

  • You’re certifying that you use the funds correctly.
  • You’re certifying that you received the correct amount.
  • You put your initials here and here you put your signature print, your name, put the date.
  • Your title was should be “owner“.

And basically, you’re done. This is what you need to send to the bank.

Now, the banks, you need to submit this form with the bank or the lender that gave you the PPP funds. You do not submit this to the SBA. So if you got your PPP loan through Kabbage, you filled out the 3508 S with Kabbage. If you got it from the Bank of America, you fill out this form and send it to Bank of America.

Now, most lenders have their own version of this form online, but, we’re going to ask you the exact same questions. So you should print this out, fill it out, and when you go to the online version, of the 30 revivals for 3508S form of your bank, then you will know exactly what to put in the online version right now.

One thing that we wanted to mention is that according to this form, it says documents that each borrower should maintain, but it’s not required to submit. And this is where we’re having issues with banks because according to the new PPP forgiveness rules. If you fill out this form, you should not have to send documentation to prove that you did the calculation correctly.

You’re going to have to keep your records for four years just in case because the SBA wants to audit your case. But we have seen that the banks don’t know this, the banks are still asking for documentation if they do, they most probably are going to ask for a copy of your 2019 Schedule C because they want to at least check that. using the formula of line 31 divided by 12 multiplied by 2.5. That’s the number that you put on your forgiveness application in this line that requested loan forgiveness.

Okay. Now we are having an issue with the banks there. We are doing this through the banks, and they’re still asking for payroll documents, which if you’re self-employed, you don’t have payroll.

So have a little bit of patience with your bank. We’re not having that issue with Kabbage or BlueVine. But other banks are requesting documentation.

That’s basically it. You’re done with your forgiveness form. Very simple, send it to the bank that gave you the PPP funds.

Now, remember we are in tax season and a lot of business owners are calling our office to see if we can help them do their taxes. The answer is yes, we are authorized by the IRS to do taxes for individuals and businesses that are located in any of the 50 US States.

So this is our contact information:

  • Address: 1016 E Osceola Parkway, Kissimmee, 34744, Florida, United States
  • Telephone: 407-344-1012
  • E-mail: [email protected]

And remember that we are part of Freedom Group, we are a group of four companies where we do tax accounting.

So we can help you in many ways.

Thank you for watching this video. Remember to subscribe to this channel and if you have received value out of this information like this video and share it with someone that can take advantage of this information.

So thank you for watching. God bless you. Bye-bye.

Was this post useful?

Share