Last week, the Small Business Administration and the Treasury Department released a simplified, one-page form for businesses and freelancers who received PPP loans under $50,000 to request forgiveness of their loan. This means that if, as a freelancer, you received a loan under that amount and can attest and prove that you used the money for eligible expenses (payroll and utilities), your loan will most likely be entirely forgiven, and you only need to fill out a simple form to request it. Note that if you also received the EIDL Advance, you will need to include that on the form. You can download the form and instructions to fill it out on the SBA’s website.
Talk to your lender (aka bank) about the process, and ask whether or not they’re ready to receive your forgiveness application. Some are, some aren’t quite yet.
It is still not entirely clear how the PPP money will be treated from a tax standpoint. As of now, it appears that the forgiven amount will not be taxed, but every expense that was paid with the loan money cannot be included in your business deductions. We will keep you updated as more information is made available.
PPP loans under $50K represent 68% of all approved loans, but only 12% of the total $ amount loaned under the program.