Paycheck Protection Program – Updated Forgiveness Applications

The Small Business Association (SBA) released an additional interim rule and updated forgiveness applications for the Paycheck Protection Program (PPP), further implementing the provisions of the newly passed PPP Flexibility Act which relaxes the program’s rules for loan forgiveness.

Newest Interim Rule

The latest rules from the SBA provide guidance for determining payroll costs and owner compensation when calculating forgiveness under the new 24-week covered period.  Notably, the rule confirms the maximum amount of forgivable payroll costs per employee as $46,154 and the maximum owner compensation as $20,833 for a 24-week covered period.

Updated Applications

PPP borrowers can now choose from two different applications to begin the forgiveness process, a revised version of the original application or an ‘EZ’ form for borrowers that meet certain conditions.  The original application has been updated with the following changes:

  • Alternative Payroll Covered Period applies to the 24-week covered period. The Alternative Payroll Covered Period may not extend beyond December 31, 2020.
  • Clarifies how to account for a new FTE reduction safe harbor – specifically, when a borrower makes a good faith attempt to rehire an employee but the offer is rejected by the employee.
  • Changes the documentation required for FTEs from the average number of FTEs per month to the average number of FTEs per week.
  • Specifies that health insurance costs for S corporation owners cannot be included when calculating payroll costs; however, retirement costs for S corporation owners are eligible costs.
  • Borrowers that received loans before June 5 can choose between using the original eight-week covered period or the new 24-week covered period.

The new EZ form may be used for borrowers who fit the following requirements:

  • You are self-employed and do not have any employees, or
  • You did not reduce annual salary or hourly wage rates of any employee by more than 25%, and you did not reduce the number of employees or the average paid hours between January 1, 2020, and the end of your covered period, or
  • You did not reduce annual salary or hourly wages of any employee by more than 25%, and you were unable to operate during the covered period at the same level of business activity as before February 15, 2020

Both forms are available on the SBA’s website HERE.

As a reminder, the PPP Flex Act did not adjust the June 30th end date of the program.  Those interested in participating have until then to apply.

As of this time, there is no official deadline to apply for loan forgiveness.  The SBA’s latest guidance states that borrowers have 10 months after the end of their covered period to apply for forgiveness.

HHS Provider Relief Fund

Since the launch of the Provider Relief Fund program in April, recipients have been waiting for guidance on reporting requirements as outlined in the terms and conditions. The terms and conditions state that recipients who received $150,000 or more in funds would be required to file quarterly reports to HHS as well as reports upon the request of the Secretary.  In a FAQ from May, HHS indicated that the first of these quarterly reports would be due 10 days after the end of the current quarter or July 10th.  In a new FAQ, HHS replaces their earlier guidance from May and adds a new statement:

“Recipients of Provider Relief Fund payments do not need to submit a separate quarterly report to HHS or the Pandemic Response Accountability Committee. HHS will develop a report containing all information necessary for recipients of Provider Relief Fund payments to comply with this provision.”

HHS goes on to explain that:

“However, the Terms and Conditions for all Provider Relief Fund payments also require recipients to submit any reports requested by the Secretary that are necessary to allow HHS to ensure compliance with payment Terms and Conditions. HHS will be requiring recipients to submit future reports relating to the recipient’s use of its PRF money. HHS will notify recipients of the content and due date(s) of such reports in the coming weeks.”

It remains unclear if this new guidance waives the quarterly reporting requirement altogether or merely delays the due date. Further guidance from HHS is anticipated in the next few weeks.


As always, ADVOCATE will continue to keep you informed on the issues impacting medical groups as they develop.


Kayley Jaquet
Manager, Regulatory Affairs