The American Institute of CPAs (AICPA) has created a loan forgiveness calculator (excel spreadsheet download) for the Paycheck Protection Program (PPP) to help resolve outstanding issues with the process.
The calculator is based on existing PPP guidance from the Department of Treasury and Small Business Administration (SBA), as well as additional recommendations added by the AICPA. Both the calculator and the included recommendations were created in consultation with an AICPA-led small business funding coalition whose members provide services and support to businesses that employ more than 75 million people.
The AICPA loan forgiveness calculator is divided into three sub-categories:
1. Non-Payroll Costs Tracker, which includes non-payroll expenses such as mortgage payments/rent, utilities, and transportation.
2. FTE (full-time equivalent) Input, which tracks whether or not a business reduced their employee count over the 8-week period; and
3. Payroll Accumulator, which helps small businesses capture the amount of eligible payroll costs and whether wages on a per employee basis declined in the 8-week covered period.
The three sub-categories are then used to make the loan forgiveness calculation. The calculator relies on several assumptions contained in the AICPA’s recommendations, such as how to calculate FTEs and the aligning of the 8-week covered period with the beginning of a pay period, rather than the date the PPP loan proceeds were disbursed. These assumptions are noted in the calculator template, as is a disclaimer that, in instances where SBA guidance is unclear, a CPA’s judgment and interpretation of the act may be necessary. To download the calculator click here.
Small businesses are eligible to have their PPP loans forgiven in full as long as the funds were used for eligible expenses during the covered 8-week period and other required criteria set forth by the Treasury and SBA has been met. The amount of the loan forgiveness may be reduced based on the percentage of eligible costs attributable to non-payroll costs, any decrease in employee headcount and decreases in salaries or wages per employee.
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