Over the past several weeks, many businesses have asked about the documentation they will need to provide for the PPP loan forgiveness process. Being prepared with this documentation will make the process much more efficient and assist in the best possible outcome for businesses seeking loan forgiveness. 

Through our resources at the AICPA, presented below is a documentation list that will give you guidance on which documents to retain and compile. At this time, this is the most current information available. However, when and if things change, we will keep you informed. If you need more information or have questions regarding this, please give us a call. We are eager to help! 

PPP Loan Forgiveness Documentation for Employers:

1. Payroll tax reports:
   • 2020 IRS Forms 941, state income and unemployment tax returns that include the 8-week covered period.
2. Compensation and Full Time Equivalents (FTEs):
   • In general, payroll reports which will include the following:
     • Gross wages for each employee for the following: 
       • During the 8-week covered period, and 
       • During the most recent full quarter before the 8-week period
     • Identifying employees in 2019, receiving more than $100k pay and also employees whose principal place of residence is outside the U.S.
     • State and local employer taxes assessed on an employee’s compensation during the 8-week covered period.
     • The average number of FTE’s per month for the following: 
       • During the 8-week covered period, 
       • Feb. 15 through June 30, 2019, and 
       • Jan. 1 through Feb. 29, 2020
     • For seasonal businesses, use average number of FTEs per month during the period February 15, 2019 through June 30, 2019.
3. Group healthcare benefits:
   • Documentation showing total costs paid for all health care benefits, including insurance premiums paid by the organization under a group health plan.
     • Include all employees and company owners.
     • Do not include employee withholdings for their portion.
4. Retirement plan benefits:     
   • Documentation showing the sum of all retirement plan funding costs paid by the organization.
     • Include all employees and the company owners.
     • Do not include employee withholdings for their portion paid.
5. Other documentation:
   • Canceled checks, receipts, account statements or other documentation of payment for other eligible costs incurred and paid during the covered period such as mortgage interest, lease payments, and utility payments.
6. For Sole Proprietors, Independent Contractors and Self- Employed Individuals:
   • The process is similar except for the following:
     • Use the 2019 Form 1040 Schedule C to verify net income (line 31) for owner income replacement calculation.
     • If you have employees, provide payroll documentation as previously outlined. Exclude owner from healthcare and retirement costs.
     • Include eligible costs incurred and paid as previously noted for businesses. (i.e. mortgage interest, lease payments, utility payments) These types of expenses must have been deducted on the 2019 Form 1040 Schedule C to be eligible for forgiveness.