Finally, the government has approved the second round of Paycheck Protection Program loans. About 284 billion was set aside for the loans, which was a part of the 900 billion coronavirus relief package. Like most of the financing, the PPP loan comes in the process after applying with all the right documents. An element is added in which the funds you spend are of eligible costs within the 24-week notice.

 

Moving Further, the program has offered small businesses an excellent opportunity by giving access to SBA - backed loans that could be fully forgiven after meeting specific criteria. For the loan forgiveness paycheck protection program, there are some documents that an individual needs to qualify for full forgiveness. This guide supports the information on the documents required in which the expenses you covered with your PPP funds should be stated. Let us have a look at the documentation required for the PPP loan forgiveness.

 

The checklist of documentation for PPP loan forgiveness

 

There are some documents and the requirement of some information that is universal such as:

• Photo ID ( Could be a driver’s license or a passport)

• Bank account statements

• The SBA loan number

 

Below given information states the documentation that you need to provide if you used the PPP loan forgiveness.

 

Payroll Backup

 

This documentation includes the payroll portion of your PPP loan. The documents should be provided from your payroll provider with the proof of paying employment taxes with IRS and state forms. The eligible payroll costs comprise the salary, health benefits and paid leave. There is complete paperwork checking the eligible cash compensation and non-cash benefit payments from the covered period. It should consist of each of the following :

• Payments to the employees: Must have the bank account statement or reports of any third-party payroll service provider with the proof of amount for the cash compensation paid to the employees.

• Federal and state payroll tax filings: Should have tax forms for the period that got overlap with the covered period or alternative payroll covered periods. Their forms required should include payroll tax filings submitted to the IRS.

 

FTE-

 

In this PPP loan forgiveness documentation, the following criteria should be there as per the full-time equivalents. There are in total of 3 FTEs required.

 

• Past year FTEs: Giving the average number of FTE employees on payroll per month employed by the borrower between February 15, 2019, and June 30, 2019.

• Current Year FTEs: the average number of FTE employees on payroll per month employed by the borrower between January 1, 2020, and February 29, 2020; or

• Seasonal FTEs: In this scenario of the seasonal employer, the average number of FTE employees on payroll per month employed by the Borrower between February 15, 2019, and June 30, 2019; between January 1, 2020, and February 29, 2020; or any consecutive twelve-week period between May 1, 2019, and September 15, 2019.

 

The listed period must be the same period selected to complete PPP Schedule A, line 11. Documents may include payroll tax filings and state quarterly business and individual employee wage reporting and unemployment insurance tax filings.

 

Non - Payroll

• Mortgage interest Payments: If an individual has made payments towards any mortgage place before February 15, 2020. Then the person can use the PPP to cover the interest area. Statements every month should be from your lender by mail via the online portal. There would be a need for mortgage account statements and Payment receipts.

• Lease Payments: A rent or lease agreement in the business name will need to be provided in addition to monthly payment statements and proof of payment. An individual needs to provide an agreement and Monthly payment statements.