By Jerry Bellune
JerryBellune@yahoo.com
Lexington County bankers tell us Paycheck Protection loan Phase 2 is more complicated.
The 2-page loan application was simple compared to the 11-page forgiveness application.
Ted Pitts of the SC Chamber of Commerce advised business owners who received a loan tio keep detailed records.
Anne Zimmerman who has 30 years helping small business owners comply with the IRS called the application "impossible for most small business owners to figure out."
But Entrepreneur magazine said the SBA actually improved its guidance on calculation, definitions of forgivable expenses and documents needed,
The SBA forgiveness application consists of 11 lines that when calculated shows in the amount of forgiveness for which a small business owner will be eligible. 
The application consists of a 3-part calculation to determine the amount eligible . 
1st, the application asks for the payroll and qualifying non-payroll costs that the business spent over the 8 weeks since it received its PPP money.
2nd is a reduction in the forgiveness amount if you have reduced pay for employees greater than 25% or if you have not brought back the same number of full-time equivalent employees.
The full-time equivalent employee (FTE) rule requires a small business to reduce its forgiveness request if it does not bring back the same number of employees that it had. 
The application does provide for a waiver of this reduction if the business failed to bring back its same employee count during the 8 weeks but later brought back the same number of employees by June 30, 2020.
3rd is the 75% payroll cost test, which states that the forgiveness request must be comprised of at least 75% payroll costs. The other 25% can only be rent, mortgage interest debt and utilities. 
If the forgiveness request in step 3 exceeds 75%, you will instead take the amount of your payroll costs and divide that by .75. This will give you your forgiveness amount. 
For example, if you had payroll costs of $70,000 and non-payroll costs $30,000, you would only be at 70%, not 75%. The $30,000 in non-payroll costs would need to be reduced. The application calculation ($70,000 divided by .75) would bring the total forgiveness amount to $93,333. This calculation lowers the non-payroll costs from $30,000 to $23,333, and now the forgiveness request consists of 75% payroll costs ($70,000) and 25% non-payroll costs ($23,333).
For more on each step, please see https://www.entrepreneur.com/article/350786?utm_source=newsletter&utm_medium=email