Loan forgiveness may be reduced if the average wages for employees during the covered period decreases by more than 25% compared to the 1st quarter of 2020.
To determine if wages has decreased by more than 25%:
Calculate the average salary for salaried employees or average hourly wage for hourly employees during the covered period. (Covered Period)
Do the same calculation for January 1 through March 31, 2020. (Lookback Period)
Divide the covered period by the lookback period.
If the result is 0.75 or greater, then the employee will not affect your forgiveness amount.
If the result is less than 0.75, multiply the lookback period value by 0.75 and subtract the covered period value.
Total results for all employees that have salary or hourly wages decreased by greater than 25%
Enter zero if there were no reductions in excess of 25%.