SBA Form 3508EZ In Form 3508 EZ Instructions

Paycheck Protection Program

PPP Loan Forgiveness Application Form 3508EZ

OMB Control No. 3245-0407
Expiration Date: 10/31/2020

PPP LOAN FORGIVENESS APPLICATION FORM 3508EZ INSTRUCTIONS FOR BORROWERS
Checklist for Using SBA Form 3508EZ
You (the Borrower) can apply for forgiveness of your Paycheck Protection Program (PPP) loan using this SBA Form 3508EZ if
you can check at least one of the three boxes below. Do not submit this Checklist with your SBA Form 3508EZ.
☐ The Borrower is a self-employed individual, independent contractor, or sole proprietor who had no employees at the time
of the PPP loan application and did not include any employee salaries in the computation of average monthly payroll in
the Borrower Application Form (SBA Form 2483).
----------------------------------------------------------------------------------------------------------------☐ The Borrower did not reduce annual salary or hourly wages of any employee by more than 25 percent during the Covered
Period or the Alternative Payroll Covered Period (as defined below) compared to the period between January 1, 2020 and
March 31, 2020 (for purposes of this statement, “employees” means only those employees that did not receive, during any
single period during 2019, wages or salary at an annualized rate of pay in an amount more than $100,000);
AND
The Borrower did not reduce the number of employees or the average paid hours of employees between January 1, 2020
and the end of the Covered Period. (Ignore reductions that arose from an inability to rehire individuals who were
employees on February 15, 2020 if the Borrower was unable to hire similarly qualified employees for unfilled positions
on or before December 31, 2020. Also ignore reductions in an employee’s hours that the Borrower offered to restore and
the employee refused. See 85 FR 33004, 33007 (June 1, 2020) for more details.
----------------------------------------------------------------------------------------------------------------☐ The Borrower did not reduce annual salary or hourly wages of any employee by more than 25 percent during the Covered
Period or the Alternative Payroll Covered Period (as defined below) compared to the period between January 1, 2020 and
March 31, 2020 (for purposes of this statement, “employees” means only those employees that did not receive, during any
single period during 2019, wages or salary at an annualized rate of pay in an amount more than $100,000);
AND
The Borrower was unable to operate during the Covered Period at the same level of business activity as before February
15, 2020, due to compliance with requirements established or guidance issued between March 1, 2020 and December 31,
2020 by the Secretary of Health and Human Services, the Director of the Centers for Disease Control and Prevention, or
the Occupational Safety and Health Administration, related to the maintenance of standards of sanitation, social
distancing, or any other work or customer safety requirement related to COVID-19.
If you can check at least one of the three boxes above, complete this SBA Form 3508EZ 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 you are unable to check one of the boxes above, you cannot use SBA Form 3508EZ and
instead you must apply for forgiveness of your PPP loan using SBA Form 3508.
Instructions for PPP Loan Forgiveness Calculation Form 3508EZ
Business Legal Name (“Borrower”)/DBA or Tradename (if applicable)/Business TIN (EIN, SSN): Enter the same
information as on your Borrower Application Form (SBA Form 2483 or lender’s equivalent).
Business Address/Business Phone/Primary Contact/E-mail Address: Enter the same information as on your Borrower
Application Form, unless there has been a change in address or contact information.
SBA PPP Loan Number: Enter the loan number assigned by SBA at the time of loan approval. Request this number from the
Lender if necessary.
Lender PPP Loan Number: Enter the loan number assigned to the PPP loan by the Lender.
PPP Loan Amount: Enter the disbursed principal amount of the PPP loan (the total loan amount you received from the Lender).
Employees at Time of Loan Application: Enter the total number of employees at the time of the PPP Loan Application.
Employees at Time of Forgiveness Application: Enter the total number of employees at the time the Borrower is applying for
loan forgiveness.
PPP Loan Disbursement Date: Enter the date that you received the PPP loan proceeds from the Lender. If loan proceeds were
received on more than one date, enter the first date on which you received PPP loan proceeds.
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EIDL Advance Amount: If the Borrower received an Economic Injury Disaster Loan (EIDL) advance, enter the amount.
EIDL Application Number: If the Borrower applied for an EIDL, enter the Borrower’s EIDL Application Number.
Payroll Schedule: Select the box that corresponds to your payroll schedule.
Covered Period: The Covered Period is either: (1) the 24-week (168-day) period beginning on the PPP Loan Disbursement Date,
or (2) if the Borrower received its PPP loan before June 5, 2020, the Borrower may elect to use an eight-week (56-day) Covered
Period. For example, if the Borrower is using a 24-week Covered Period and received its PPP loan proceeds on Monday, April 20,
the first day of the Covered Period is April 20 and the last day of the Covered Period is Sunday, October 4. In no event may the
Covered Period extend beyond December 31, 2020.
Alternative Payroll Covered Period: For administrative convenience, Borrowers with a biweekly (or more frequent) payroll
schedule may elect to calculate eligible payroll costs using the 24-week (168-day) period or for loans received before June 5, 2020
at the election of the borrower, the eight-week (56-day) period that begins on the first day of their first pay period following their
PPP Loan Disbursement Date. For example, if the Borrower is using a 24-week Alternative Payroll Covered Period and received
its PPP loan proceeds on Monday, April 20, and the first day of its first pay period following its PPP loan disbursement is Sunday,
April 26, the first day of the Alternative Payroll Covered Period is April 26 and the last day of the Alternative Payroll Covered
Period is Saturday, October 10. Borrowers that elect to use the Alternative Payroll Covered Period must apply the Alternative
Payroll Covered Period wherever there is a reference in this application to “the Covered Period or the Alternative Payroll Covered
Period.” However, Borrowers must apply the Covered Period (not the Alternative Payroll Covered Period) wherever there is a
reference in this application to “the Covered Period” only. In no event may the Alternative Payroll Covered Period extend beyond
December 31, 2020.
If Borrower Received PPP Loans in Excess of $2 Million: Check the box if the Borrower, together with its affiliates (to
the extent required under SBA’s interim final rule on affiliates (85 FR 20817 (April 15, 2020)) and not waived under 15
U.S.C. 636(a)(36)(D)(iv)), received PPP loans with an original principal amount in excess of $2 million.
Forgiveness Amount Calculation (see Summary of Costs Eligible for Forgiveness below):
Line 1: Enter total eligible payroll costs incurred or paid during the Covered Period or the Alternative Payroll Covered Period.
To calculate these costs, sum the following:
Cash Compensation: The sum of gross salary, gross wages, gross tips, gross 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 the Covered Period or the Alternative Payroll Covered Period. For each
individual employee, the total amount of cash compensation eligible for forgiveness may not exceed an annual salary of
$100,000, as prorated for the Covered Period. For an 8-week Covered Period, that total is $15,385. For a 24-week Covered
Period, that total is $46,154 for purposes of this 3508EZ. You can only include compensation of employees who were
employed by the Borrower at any point during the Covered Period or Alternative Payroll Covered Period and whose
principal place of residence is in the United States.
Employee Benefits: The total amount paid by the Borrower for:
1. Employer contributions for employee health insurance, including employer contributions to a self-insured,
employer-sponsored group health plan, but excluding any pre-tax or after-tax contributions by employees. Do not
add employer health insurance contributions made on behalf of a self-employed individual, general partners, or
owner-employees of an S-corporation, because such payments are already included in their compensation.
2. Employer contributions to employee retirement plans, excluding any pre-tax or after-tax contributions by
employees. Do not add employer retirement contributions made on behalf of a self-employed individual or general
partners, because such payments are already included in their compensation, and contributions on behalf of owneremployees are capped at 2.5 months’ worth of the 2019 contribution amount.
3. Employer state and local taxes paid by the borrower and assessed on employee compensation (e.g., state
unemployment insurance tax), excluding any taxes withheld from employee earnings.
Owner Compensation: Enter any amounts paid to owners (owner-employees, a self-employed individual, or general
partners). For a 24-week Covered Period, this amount is capped at $20,833 (the 2.5-month equivalent of $100,000 per year)
for each individual or the 2.5-month equivalent of their applicable compensation in 2019, whichever is lower. For an 8week Covered Period, this amount is capped at 8/52 of 2019 compensation (up to $15,385).
Line 2: Enter the amount of business mortgage interest payments paid or incurred during the Covered Period for any business
mortgage obligation on real or personal property incurred before February 15, 2020. Do not include prepayments.
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Line 3: Enter the amount of business rent or lease payments paid or incurred for real or personal property during the Covered
Period, pursuant to lease agreements in force before February 15, 2020.
Line 4: Enter the amount of business utility payments paid or incurred during the Covered Period, for business utilities for which
service began before February 15, 2020.
NOTE: For lines 2-4, you are not required to report payments that you do not want to include in the forgiveness amount.
Line 5: Add lines 1 through 4, enter the total.
Line 6: Enter the PPP Loan Amount.
Line 7: Divide the amount on line 1 by 0.60, and enter the amount. This determines whether at least 60% of the potential
forgiveness amount was used for payroll costs.
Line 8: Enter the smallest of lines 5, 6, or 7. Note: If applicable, SBA will deduct EIDL Advance Amounts from the forgiveness
amount remitted to the Lender.
Summary of Costs Eligible for Forgiveness:
Borrowers are eligible for loan forgiveness for the following costs:
1. Eligible payroll costs. Borrowers are generally eligible for forgiveness for the payroll costs paid and payroll costs incurred
during the 24-week (168-day) or 8-week (56-day) Covered Period (or Alternative Payroll Covered Period) (“payroll costs”).
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 the Covered Period (or Alternative Payroll Covered Period) are eligible
for forgiveness if paid on or before the next regular payroll date. Otherwise, payroll costs must be paid during the Covered
Period (or Alternative Payroll Covered Period). For each individual employee, the total amount of cash compensation
eligible for forgiveness may not exceed an annual salary of $100,000, as prorated for the Covered Period. Count payroll
costs that were both paid and incurred only once. For information on what qualifies as payroll costs, see Interim Final Rule
on Paycheck Protection Program posted on April 2, 2020 (85 FR 20811), as amended by the Revisions to First Interim Final
Rule, posted on June 11, 2020). Include only payroll costs for employees whose principal place of residence is in the
United States.
2.

Eligible nonpayroll costs. Nonpayroll costs eligible for forgiveness consist of:
(a) covered mortgage obligations: payments of mortgage interest (not including any prepayment or payment of principal)
on any business mortgage obligation on real or personal property incurred before February 15, 2020 (“business mortgage
interest payments”);
(b) covered rent obligations: business rent or lease payments pursuant to lease agreements for real or personal property in
force before February 15, 2020 (“business rent or lease payments”); and
(c) covered utility payments: business payments for a service for the distribution of electricity, gas, water,
telephone, transportation, or internet access for which service began before February 15, 2020 (“business utility
payments”).
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 40% of the total forgiveness amount. Count nonpayroll costs that were both paid and incurred only once.

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PPP Loan Forgiveness Application Form 3508EZ
Documents that Each Borrower Must Submit with its PPP Loan Forgiveness Application Form 3508EZ
PPP Loan Forgiveness Calculation Form 3508EZ
Payroll: Documentation verifying the eligible cash compensation and non-cash benefit payments from the Covered Period or the
Alternative Payroll Covered Period consisting of each of the following:
a. Bank account statements or third-party payroll service provider reports documenting the amount of cash compensation paid
to employees.
b. Tax forms (or equivalent third-party payroll service provider reports) for the periods that overlap with the Covered Period
or the Alternative Payroll Covered Period:
i. Payroll tax filings reported, or that will be reported, to the IRS (typically, Form 941); and
ii. State quarterly business and individual employee wage reporting and unemployment insurance tax filings reported,
or that will be reported, to the relevant state.
c. Payment receipts, cancelled checks, or account statements documenting the amount of any employer contributions to
employee health insurance and retirement plans that the Borrower included in the forgiveness amount.
d. If you checked only the second box on the checklist on page 1 of these instructions, the average number of full-time
equivalent employees on payroll employed by the Borrower on January 1, 2020 and at the end of the Covered Period.
Nonpayroll: Documentation verifying existence of the obligations/services prior to February 15, 2020 and eligible payments from
the Covered Period.
a. Business mortgage interest payments: Copy of lender amortization schedule and receipts or cancelled checks verifying
eligible payments from the Covered Period; or lender account statements from February 2020 and the months of the Covered
Period through one month after the end of the Covered Period verifying interest amounts and eligible payments.
b. Business rent or lease payments: Copy of current lease agreement and receipts or cancelled checks verifying eligible
payments from the Covered Period; or lessor account statements from February 2020 and from the Covered Period through
one month after the end of the Covered Period verifying eligible payments.
c. Business utility payments: Copy of invoices from February 2020 and those paid during the Covered Period and receipts,
cancelled checks, or account statements verifying those eligible payments
Documents that Each Borrower Must Maintain but is Not Required to Submit
Documentation supporting the certification that annual salaries or hourly wages were not reduced by more than 25 percent during the
Covered Period or the Alternative Payroll Covered Period relative to the period between January 1, 2020 and March 31, 2020. This
documentation must include payroll records that separately list each employee and show the amounts paid to each employee during
the period between January 1, 2020 and March 31, 2020, and the amounts paid to each employee during the Covered Period or
Alternative Payroll Covered Period.
Documentation regarding any employee job offers and refusals, refusals to accept restoration of reductions in hours, firings for
cause, voluntary resignations, written requests by any employee for reductions in work schedule, and any inability to hire similarly
qualified employees for unfilled positions on or before December 31, 2020.
Documentation supporting the certification, if applicable, that the Borrower did not reduce the number of employees or the average
paid hours of employees between January 1, 2020 and the end of the Covered Period (other than any reductions that arose from an
inability to rehire individuals who were employees on February 15, 2020, if the Borrower was unable to hire similarly qualified
employees for unfilled positions on or before December 31, 2020). This documentation must include payroll records that separately
list each employee and show the amounts paid to each employee between January 1, 2020 and the end of the Covered Period.
Documentation supporting the certification, if applicable, that the Borrower was unable to operate between February 15, 2020 and
the end of the Covered Period at the same level of business activity as before February 15, 2020 due to compliance with
requirements established or guidance issued between March 1, 2020 and December 31, 2020 by the Secretary of Health and Human
Services, the Director of the Centers for Disease Control and Prevention, or the Occupational Safety and Health Administration,
related to the maintenance of standards of sanitation, social distancing, or any other work or customer safety requirement related to
COVID-19. This documentation must include copies of the applicable requirements for each borrower location and relevant
borrower financial records.
All records relating to the Borrower’s PPP loan, including documentation submitted with its PPP loan application, documentation
supporting the Borrower’s certifications as to the necessity of the loan request and its eligibility for a PPP loan, documentation
necessary to support the Borrower’s loan forgiveness application, and documentation demonstrating the Borrower’s material
compliance with PPP requirements. The Borrower must retain all such documentation in its files for six years after the date the loan
is forgiven or repaid in full, and permit authorized representatives of SBA, including representatives of its Office of Inspector
General, to access such files upon request.
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