Documentation Retention for PPP Loans

Documentation Retention for PPP Loans

November 19, 2020 - For those of you who received a Paycheck Protection Program (PPP) loan and will be filing for forgiveness, please keep in mind that supporting documents must be retained for 6 years after the earlier of the date full forgiveness is granted or the last day of loan term (either 2 or 5 years - potentially up to 11 years).

Documentation Needed for Forgiveness Related to Payroll Costs:

  • Bank account statements or third party payroll service provider reports, tax forms (941, NYS-45)
  • Payment receipts, canceled checks or account statements for healthcare and retirement

Documentation Needed for Forgiveness Related to Non-Payroll Costs:

  • Mortgage interest:
    • Lender amortization schedule, receipts or cancelled checks, lender account statements from February 1 through one month after covered period
  • Rent or lease payments:
    • Copy of current lease, receipts or cancelled checks for payments made in the covered period, lessor account statements from February 1 through one month after covered period
  • Utility payments:
    • Copy of invoices from February 2020 and paid during the covered period, receipts or cancelled checks or account statements verifying payment

Documentation Needed to Support No Reduction in Salary/Wage:

  • Payroll reports separately listing each employee, showing amount paid to each employee during the covered period, showing amount paid to each employee 1.1.20 to 3.31.20
  • Documents regarding any employee job offers, refusal to accept restoration of reduced hours, firing for cause, voluntary resignation, written request for reduction in work schedule and inability to hire similar qualified individuals for unfilled positions by 12.31.20
  • Documentation needed to support FTEs (Did not reduce number of FTEs between 1.1.20 and the end of the covered period)
  • Payroll records separately listing each employee, showing amounts paid to each between 1.1.20 and end of covered period
  • Other documentation if applicable, document to show unable to operate (Various governmental shutdowns, Executive Orders, etc.)

Retain a copy of the loan application, documents submitted with the loan application, the necessity for the loan supporting the application, and the above referenced documentation showing compliance with the PPP requirements.

Please contact your Dermody, Burke & Brown tax advisor to further discuss any questions you may have.

 

The information reflected in this article was current at the time of publication.  This information will not be modified or updated for any subsequent tax law changes, if any.