PPP Loan Forgiveness – A Summary of Available Guidance

Originally published May 19, 2020

Mike Batts, CPA
Michele Wales, CPA

Updated May 20, 2020 to clarify applicability of the safe harbor described in Step 2 of Section 5.a.

Updated May 29, 2020 to reflect clarifications from new SBA Interim Final Rule on loan forgiveness published May 22, 2020.

Late on Friday, May 15, the Small Business Administration (SBA) issued the long-awaited forgiveness application for Paycheck Protection Program (PPP) loans along with a related schedule, a related worksheet, and instructions.  A copy of all of the documents is available here.

The loan forgiveness application, together with its related schedule, worksheet, rules, safe harbors, calculations, and options, rivals a federal income tax return in its complexity.

Some PPP borrowers are already several weeks into the eight-week period during which the PPP loan funds must be spent (under current guidance) in order to qualify for forgiveness.  Borrowers have been anxiously awaiting official guidance to clarify numerous unanswered questions about how the forgiveness process will work and how the forgiveness amount will be calculated.  The SBA issued additional guidance in the form of an “Interim Final Rule” on May 22.  It is possible that the SBA could issue more guidance further clarifying technical questions, and Congress could still act to modify fundamental elements of the forgiveness process.

Based on a combination of provisions in the CARES Act, SBA guidance, and information published in connection with the new forgiveness application, we have provided a summary of our understanding of core elements of the forgiveness process.

This analysis will be updated periodically.

Click here for the analysis.


This publication is designed to provide accurate information regarding the subject matter covered. It is provided with the understanding that the material contained herein does not constitute legal, accounting, tax or other professional advice. If such advice or assistance is required, the services of a competent professional should be sought. This document is copyrighted. All rights reserved. Infringement of the copyright may result in civil liability. For permission to reprint, please contact us.