Borrowers are eligible for loan forgiveness for the following costs:
1. Eligible payroll costs. Borrowers are generally eligible for forgiveness for the payroll costs paid and payroll costs incurred
during the eight-week (56-day) Covered Period (or Alternative Payroll Covered Period) (“payroll costs”). Payroll costs are
considered paid on the day that paychecks are distributed or the Borrower originates an ACH credit transaction. Payroll
costs are considered incurred on the day that the employee’s pay is earned. Payroll costs incurred but not paid during the
Borrower’s last pay period of the Covered Period (or Alternative Payroll Covered Period) are eligible for forgiveness if paid
on or before the next regular payroll date. Otherwise, payroll costs must be paid during the Covered Period (or Alternative
Payroll Covered Period). For each individual employee, the total amount of cash compensation eligible for forgiveness may
not exceed an annual salary of $100,000, as prorated for the covered period. Count payroll costs that were both paid and
incurred only once. For information on what qualifies as payroll costs, see Interim Final Rule on Paycheck Protection
Program posted on April 2, 2020 (85 FR 20811).
2. Eligible nonpayroll costs. Nonpayroll costs eligible for forgiveness consist of:
(a) covered mortgage obligations: payments of interest (not including any prepayment or payment of principal) on any
business mortgage obligation on real or personal property incurred before February 15, 2020 (“business mortgage
interest payments”);
(b) covered rent obligations: business rent or lease payments pursuant to lease agreements for real or personal property in
force before February 15, 2020 (“business rent or lease payments”); and
(c) covered utility payments: business payments for a service for the distribution of electricity, gas, water,
transportation, telephone, or internet access for which service began before February 15, 2020 (“business utility
payments”).
An eligible nonpayroll cost must be paid during the Covered Period or incurred during the Covered Period and paid on or
before the next regular billing date, even if the billing date is after the Covered Period. Eligible nonpayroll costs cannot
exceed 25% of the total forgiveness amount. Count nonpayroll costs that were both paid and incurred only once.
The amount of loan forgiveness the Borrower applies for may be subject to reductions as explained in PPP Schedule A.