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What you need to know about the Paycheck Protection Program

Learn how you may qualify for a loan through the Paycheck Protection Program and how it may help your business.

Note: The Paycheck Protection Program reopened on January 11, 2021. The SBA may issue additional guidance and we will update our resources accordingly. Please refer to the SBA and Treasury to confirm current program rules and how they apply to your particular situation.

What is the Paycheck Protection Program?

The Paycheck Protection Program is part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act, which billions of dollars in government-backed loans to help small businesses and other eligible applicants continue covering payroll costs and certain operating expenses.

Based on your average monthly payroll costs, you may be eligible for up to $2 million as part of the program, and you must use 60% to cover eligible payroll costs. These costs include, but aren’t limited to, PTO, insurance premiums, retirement, etc.. The loan may also be used to cover up to 40% on other eligible non-payroll costs, including mortgage interest, rent, and utilities, among other uses.

Who qualifies for the Paycheck Protection Program loan?

Businesses and organizations that meet the standards set by the SBA may qualify for the loan.

First, you may qualify for the PPP loan if you’ve been impacted by COVID-19 and own a small business, as defined by the SBA. Second, the tax structure of your organization in part helps determine eligibility. You need to be a business, a 501(c)(3) nonprofit organization, a 501(c)(6) organization, a 501(c)(19) veterans organization, housing cooperative, or tribal business. Third, you need to employ less than 300 full-time employees* or meet the SBA employee size threshold.

If you’re in the food service or hospitality industries, have more than 300 employees, but have fewer than 300 employees at each location, you also may be eligible for a Paycheck Protection Program loan.

You may also be eligible for a loan if you are a sole proprietorship, an independent contractor, or an eligible self-employed individual.

To be eligible your business or organization has to have been in operation on February 15, 2020.

To be eligible your business must have also had a reduction in gross receipts in excess of 25% over two comparable time periods. See this article for details.

Is the Paycheck Protection Program loan forgivable?

Yes. Loans issued through the Paycheck Protection Program are eligible for forgiveness. Under certain criteria, and if you use the funds as directed by the SBA, the loan may be forgiven, in whole or in part. These criteria include but are not limited to the following:

  • Use at least 60% of the forgivable amount on eligible payroll costs and 40% on eligible non-payroll costs.
  • Maintain the same number of employees on the payroll.
  • Maintain employee salary levels.
  • Rehire and restore wages to employees who were laid off between February 15 and April 26, 2020, as a result of the coronavirus by June 30, 2020.

If you’re unable to meet the above requirements for forgiveness, you may still be eligible for partial loan forgiveness.

The SBA states that your total loan forgiveness may be reduced, in whole or in part, as a result of the following:

The number of your employees* decreased:

Your loan forgiveness amount may be reduced if the average weekly number of full-time equivalent employees you employ during your 8 or 24 week covered period is less than the average weekly number of full-time equivalent employees between one of the following reference periods:
• February 15, 2019 and June 30, 2019, or
• January 1, 2020 and February 29, 2020

Seasonal employers may choose either of the above reference periods or any consecutive twelve-week period between May 1, 2019 and September 15, 2019.

Your loan forgiveness amount will not be reduced based on employee headcount reductions if either:

  • Reductions made between February 15, 2020 and April 26, 2020 are reversed by the earlier of (i) the date you submit your application for loan forgiveness or (ii) December 31, 2020, or
  • Your business was unable to operate between February 15, 2020 and the end of your Loan Forgiveness Covered Period at the same level as before February 1, 2020, due to compliance with certain federal requirements or guidance issued between March 1, 2020 and December 31, 2020 related to maintaining standards of sanitation, social distancing, or other work or customer safety requirements related to COVID-19.

The total or salary employees* wages decreased:

Your loan forgiveness amount may be reduced if the average annual salary or average hourly wages for any employee during the Loan Forgiveness Covered Period (or, if applicable, the Alternative Payroll Covered Period) are more than 25% lower as compared to Q1 2020. This forgiveness reduction does not apply to reductions associated with employees who received compensation at an annualized rate of more than $100,000 for any pay period in 2019.

If reductions made between February 15, 2020 and April 26, 2020 are reversed by the earlier of (i) the date you submit your application for loan forgiveness or (ii) December 31, 2020, your loan forgiveness amount will not be reduced due to salary or wage reductions.

Note: Want to learn more about forgiveness? Please refer to this article.

How can I apply for the loan outside of QuickBooks?

If you're interested in applying for a loan under the Paycheck Protection Program, there are several steps that you will need to take to apply. If you use a QuickBooks or Intuit Payroll product, you can gather the information you need straight from your payroll.

Where can I find more information?

If you have any more questions about the CARES Act, check out:

If you're looking for resources on operating your business during these challenging times, see our:


Regulations and guidance from the SBA and the U.S. Department of the Treasury on the PPP are evolving rapidly and the above information may be outdated.  Please refer to the latest guidance from SBA and Treasury to confirm current program rules and how they apply to your particular situation.

The funding described is made available to businesses located in the United States of America and are not available in other locations.

This content is for information purposes only and should not be considered legal, accounting or tax advice, or a substitute for obtaining such advice specific to your business. Additional information and exceptions may apply. Applicable laws may vary by state or locality. No assurance is given that the information is comprehensive in its coverage or that it is suitable in dealing with a customers particular situation. Intuit Financing Inc. (d/b/a QuickBooks Capital) does not have any responsibility for updating or revising any information presented herein. Accordingly, the information provided should not be relied upon as a substitute for independent research. QuickBooks Capital does not warrant that the material contained herein will continue to be accurate, nor that it is completely free of errors when published. Readers should verify statements before relying on them.

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