Costs eligible for loan forgiveness for first and second draw loans:
1. PAYROLL COSTS
Payroll costs include compensation to employees in the form of salary, wages, commissions, cash tips, vacation pay, allowance for dismissal and employer payments for insurance premiums (group health care, group life, disability, vision or dental insurance) and retirement. Please note the addition of group life, disability, vision and dental insurance.
2. NON-PAYROLL COSTS
a. Mortgage interest, rent, utility payments
b. Worker protection expenditures: PPE and costs to comply with COVID-19 federal health and safety guidelines.
c. Covered supplier costs: expenditures to a supplier that are essential to the recipient’s current operations.
d. Covered operations expenditures: payments for any business software or cloud computing service that facilitates business operations, product or service delivery, the processing, payment, or tracking of payroll expenses, human resources, sales and billing functions, or accounting or tracking of supplies, inventory, records, and expenses.
e. Covered property damage costs: costs related to 2020 public disturbances not covered by insurance or other compensation.
These new rules apply to original PPP loans and new PPP loans (unless forgiveness has already been processed).
For forgiveness, the business must document that at least 60% of the loan was used for payroll costs.