I think it’s important to first determine if you qualify for the EZ PPP Loan Application before getting bogged down in some of the other provisions and rules. The whole goal of the EZ App is to require less documentation, fewer calculations, and simplifies the process dramatically for a large number of business owners.
Here are the major takeaways and general instructions:
- To qualify for the EZ App, the church must meet one of three tests. Essentially, you need to be able to check the box under any of the following three options:
- You are self-employed and have no employees; or
- You had employees, but did not reduce their salaries or wages during the covered period by more than 25 percent AND did not reduce the number of hours worked by employees (essentially meeting what’s come to be known as the FTE employee rule); or
- You had employees, but did not reduce their salaries or wages during the covered period by more than 25 percent, AND due to complying with essentially shelter-in-place laws during the covered period, you were unable to operate during the covered period at the same level of business that existed before February 15, 2020.
- If you are able to check any of the three boxes above, you are allowed to use the SBA Form 3508EZ.
- Next, you need to decide if you are going to apply under the eight-week covered period or the 24-week period (not to exceed December 31, 2020). Only borrowers that received loans before June 5 can choose between the eight- or 24-week period.
- Finally, remember you apply for forgiveness with the same lender you applied with and received the PPP Loan. Some banks are already working to create online/digital applications to simplify the process on their end as well.
Clergy Financial Resources serves as a resource for clients to help analyze the complexity of clergy tax law, church payroll & HR issues. Our professionals are committed to helping clients stay informed about tax news, developments and trends in various specialty areas.
This article is intended to provide readers with guidance in tax matters. The article does not constitute, and should not be treated as professional advice regarding the use of any particular tax technique. Every effort has been made to assure the accuracy of the information. Clergy Financial Resources and the author do not assume responsibility for any individual’s reliance upon the information provided in the article. Readers should independently verify all information before applying it to a particular fact situation, and should independently determine the impact of any particular tax planning technique. If you are seeking legal advice, you are encouraged to consult an attorney.
For more information or if you need additional assistance, please use the contact information below.
Clergy Financial Resources
11214 86th Avenue N.
Maple Grove, MN 55369
Tel: (763) 425-8778
Fax: (888) 876-5101