After reviewing the 3508EZ form the first time, I too thought Line 8 would limit the amount of forgiveness. Upon further review, this is what I noticed:
Enter the smallest of lines 5,6,7:
Line 5: Combine the total Payroll (Line 1) and Non-Payroll (Line 2-4) Expenses. If this number were the lowest number that would suggest that you did not spend the entire amount of your PPP loan.
Line 6: The PPP Loan Amount. If this is the smallest number, this means your payroll expenses exceeded your loan amount and loan forgiveness is expected
Line 7: Total Payroll Costs/0.60 = Another way to look at this calculation would be to say “Based on my total payroll costs, I would meet the 60% payroll requirement for a loan up X amount.
Let us assume that the PPP Loan was for 100,000
Our Payroll expenses were 80,000
Non-Payroll expenses were 10,000
These would be your line totals:
Line 5: 80,000+10,000 = 90,000
Line 6: 100,000
Line 7: 80,000/0.60 = 133,333.33
This means your maximum loan forgiveness would be $90,000