If your business was granted money from the Paycheck Protection Program (PPP) this year, it’s time to fill out Form 3508S. We’re not kidding — the form is due November 30th! Before we get started we should say, “Some restrictions apply.” You can’t use this form if you received more than $50,000 in PPP funds; in that case you must use the “regular” Form 3508 which, unfortunately, is not a “single page” form.
Let’s break the form down into different sections and discuss them separately.
Part 1: Borrower and Loan Details
The top of Page 1 of Form 3508S is mostly self-explanatory. Here’s a brief description of how to fill in some of the trickier fields:
- DBA or Trade Name: Your business may not have a DBA. However, if, for example, your name is Michelle and you own an auto repair shop, your DBA might be Michelle’s Auto Parts and Repair.
- Business TIN (EIN, SSN): It’s like acronym city here, but we’re here to break it down for you. A TIN is a Taxpayer Identification Number. Your business’s TIN is either an EIN (Employer Identification Number) or an SSN (Social Security Number):
- If your business is set up to have employees, its TIN would be an EIN. If you have or want employees and haven’t applied for an EIN, then do so right away. Your business might still have an EIN even if you don’t have any employees.
- If your business is just starting out, or for any other reason you’re okay with using your own SSN as your business’s TIN, that’s perfectly legal, though you may want to register an EIN for your business at some point in order to keep your own identity safe.
- PPP Loan Amount: This is probably very clear, but we’d like to remind you that if you’re writing or typing an amount in here that’s over $50,000, you need to fill out the “regular” Form 3508 instead.
- Employees at Time of Loan Application / Forgiveness Application: While some government forms require you to figure FTE (Full-Time Equivalent) employees, you don’t have to do the fancy math here. Just count how many W-2 employees you had/have at each stage mentioned.
- EIDL Advance Amount: EIDL stands for Economic Injury Disaster Loan. As rough as the year has been, hopefully you can remember whether your business applied for an EIDL loan.
- Forgiveness Amount: Don’t be shy. As long as you correctly calculated your original PPP loan amount and spent the PPP funds on forgivable costs according to the rules, you can enter the full “PPP Loan Amount” here. You can read more about these rules below in Part 2.
Part 2: Initialing and Signing the Form
It’s understandable if the rest of Page 1 feels a little more stressful. The Small Business Administration (SBA) expects you to affirm and initial seven fields, then sign and date the form. If the SBA finds that you have falsely affirmed any of these facts with regards to your business’s use of PPP funds, then your forgiveness application may be denied.
Here’s a sum-up in plain English of the items you are expected to initial:
- You didn’t request a higher forgiveness amount than the amount of your loan (we think this is quite reasonable of course).
- PPP funds were used for only these four costs:
- Payroll costs to retain employees (totaling at least 60% of the full loan amount)
- Business mortgage interest payments
- Business rent or lease payments
- Business utility payments
- The owner(s) of your business did not use more than $20,833 each in PPP funds for their own payroll (for a 24-week period).
- If your PPP loan covered an 8-week period then the cap changes to $15,385.
- The government may enact civil or criminal penalties in the case of fraud.
- You calculated your payroll correctly, submitted the correct forms to your lender on time, and the information you provided to your lender agrees with any documentation you’ve sent to other government agencies, such as the IRS.
- The SBA may request further documentation from you. If you fail to provide this documentation on time, they may deny your forgiveness request.
Part 3: Demographic Information
As with many government forms, the demographic information requested at the end of this form is entirely optional. We at TL;DR agree with the LGBTQIA+ community that there are more than two genders, but this form only lets you pick Male, Female, or Not Disclosed. Unfortunately, Form 3508S isn’t the only government form that’s behind the times on gender.
We also feel that the strict categorization of race with no write-in option is reductive and does a disservice to people who identify differently than the categories provided. Again, this is not unusual for US government forms. It is up to you to decide whether you would like to represent yourself under the categories provided, write an X, or disregard Page 2 as a whole.
TL;DR: If your business applied for the PPP and you are looking to forgive all or part of the loan (who wouldn’t?), you need to fill Form 3508 or 3508S before November 30th! Form 3508S is simpler and for those who borrowed less than $50,000. Make sure to get all your documents handy, because you will need to fill in details about your business and your PPP loan. Next, you are required to initial several fields to say that you followed the rules, you’re not committing fraud, and you understand that there are consequences for fraud. The form is known as a “single-page” form even though there are two pages, but page two is 100% optional, which is good because it’s not very LGBTQIA+ friendly.