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FTE: Documentation showing (at the election of the Borrower): a. the average number of FTE employees on payroll per week employed by the Borrower between February 15, 2019 and The maximum amount allowed is $20,833. So 2.5 months of profit was your PPP loan amount. 1st Draw PPP Loan Enrollment –Schedule C Navigating to your Dashboard Navigate to the portal with your browser, Chrome is the preferred internet browser (the application will not work in Internet Explorer) • If this is your first time applying for a PPP loan, click the . Business Guide. Can I re-apply for a financial loan if we came back my first one? For Schedule C businesses with no employees you get to use the new Form 3508EZ which is pretty simple. Now, many of those sole proprietors are asking how to obtain full forgiveness of PPP loans in the absence of payroll documentation. Before the SBA releases guidance it is unclear what time frame shall be properly used for the calculation. The U.S. Small Business Administration (SBA) issued new Paycheck Protection Program (PPP) rules that allow self-employed individuals who file Form 1040, Schedule C, Profit or Loss From Business, to calculate their maximum loan amount using gross income instead of net profit. You will use this document to determine Owner Income Replacement on the application. Paycheck Protection Program (PPP) EZ Loan Forgiveness Application Form. Divide that Step 1 amount by 12 to get your average monthly net profit/gross income. Here are the main points on full loan forgiveness for self-employed people up to $20,833. The cap amounts are computed using your net profit from line 31 of your 2019 Schedule C. Your easy-peasy road to 100 percent loan forgiveness is the 11-week program. If I haven’t applied for my PPP loans yet and I use Schedule C, should I wait to apply? Over the 24 weeks, you can claim 2.5 months’ worth of your 2019 net profit, as reported on line 31 of your Schedule C. Assuming your PPP loan did not include other payroll expenses, this amount would be equal to your entire PPP loan. The new rule confirms that individuals with self-employment income filing Schedule Cs are eligible for a PPP loan if they: (1) were operating on February 15, 2020; (2) were “an individual with self-employment income (such as an independent contractor or a sole proprietor);” (3) have their principal place of residence in the U.S.; and (4) filed or will file a 2019 Schedule C. Anyone who applied for their loan using their Schedule C can file for automatic forgiveness. less than your loan amount, and you have business related interest, rent, lease or utility expenses, these expenses may be forgiven, too. COVID-19 relief options and additional resources: LEARN MORE. PPP Self-Employed Loan Forgiveness As of 6/10/2020 • Utilities Includes payment for electricity, gas, water, transportation, telephone, or internet access. 2. Question. This is a blog on how to apply for Program Protection Program (PPP) loan forgiveness Form 3508S for self-employed individuals with no employees. If you’ve hired 1099 workers, they cannot be included in your PPP loan calculation and may apply for their own PPP loans. Under the PPP loan program, eligible businesses (those with no more than 500 employees) could apply for a forgivable loan that, if used for payroll costs and certain other expenses (e.g., rent, mortgage interest, utilities) within a certain period of time, would be eligible for loan forgiveness. I know that I can achieve full forgiveness based solely on my 2019 Schedule C income in 10.8 weeks under the 24-week program. From your 2019 or 2020 Schedule C, use the lesser of: a. The maximum amount for a PPP loan is 2.5 times your average monthly payroll costs. If you do this, you will need to maintain full employment at full salary to maintain the maximum forgiveness amount. There is a place for PPP forgiveness in the 1120S and 1065, but not Schedule C (yet). Note: Regardless of whether you have filed a 2019 tax return with the IRS, you must provide the 2019 Form 1040 Schedule C with your PPP loan application to substantiate the applied-for PPP loan amount and a 2019 IRS Form 1099-MISC detailing nonemployee compensation received (box 7), invoice, bank statement, or book of record that establishes you are self-employed. forgiveness. If your PPP loan (or 2nd Draw PPP loan) amount is $50,000 or less, you are exempt from FTE and wage maintenance requirements. How much am i able to claim? The PPP loan was based on your 2019 Schedule C net income / 12 * 2.5 months. You may. The SBA includes sole proprietors, self-employed individuals, and independent contractors in their definition of Self-Employed Schedule C or Schedule F Filers. Learning Platform. Later, the PPP was opened to sole proprietors who report income on Schedule C filings instead of via payroll. When you apply for forgiveness, you must provide us with a copies of your filed 2019 Schedule C and your filed 2020 Schedule C. How to document 25% reduction in gross receipts for a 2nd Draw PPP loan Service must have been established prior to 2/15/2020 Limited to the extent it was claimed or entitled to be claimed on 2019 Schedule C at $15,385 under the eight-week covered period; or at $20,833 under the 24-week covered period. Multiply the Step 2 … That is all that is required. Draw PPP Loan forgiveness application), or (b) ... forgiveness amount (PPP Schedule A, lines (6) and (7)). Created with Sketch. I would expect that you should be getting 100% forgiveness. This may apply to sole proprietors, self-employed individuals, independent contractors and some single-member LLCs. Individuals with income from self-employment who file a Form 1040, Schedule C, are eligible for a PPP loan if: (a) they were in operation on or before February 15, 2020, and (b) they have self-employment income, and (c) their principal place of business is in the United States; and (d) they filed or will file a Form 1040 Schedule C for 2019. In addition to changes to how a Schedule C filer calculates their maximum PPP Loan request, the IFR removes two other barriers for small business owners. Some items to note: Schedule C filers who were in business as of 2/15/2020, with SE income are eligible for a PPP loan if their principle place of residence is the U.S. and they have filed or will file a 2019 Form 1040 with a Schedule C. If you are applying for forgiveness just based on owner’s compensation replacement (and not including other nonpayroll expenses) the SBA states that the 2019 or 2020 Form 1040 Schedule C that the borrower provided at the time of the PPP loan application must be used to determine the amount of net profit allocated to the owner for the covered period. On February 22, 2021, the Biden-Harris administration announced these important PPP rule changes that allow PPP borrowers who file using IRS Form 1040 Schedule C to use GROSS profits, rather than NET profits, to calculate their maximum PPP loan amount. Here’s the big difference: • If the 24-week covered period applies, your loan forgiveness for your deemed payroll is capped at 2.5 months of your 2019 Schedule C net profit, not to exceed $20,833. There is suppose to be a line for nonconforming states, but it hasn't been implemented yet. The line for PPP forgiveness should include EIDL grants and loans, since they all the same for tax purposes, but it doesn't mention either one. Farm partnerships still not addressed and they may face having to repay part of their PPP loan … For PPP loan forgiveness, you need to use the funds on payroll, rent, mortgage, and utilities to qualify. Usually these are Sole Proprietors, Independent Contractors and owners of Single Member LLC’s. Income listed on a Schedule C in your personal tax return is the only payroll that can be used to calculate your PPP loan amount. b. Self-Employed Schedule C or F Filers. First Draw PPP loans are made to eligible borrowers who qualify for full loan forgiveness if they have done the following during the 8- to 24-week period following their PPP loan disbursement: Are capped revenue from the Schedule C, use the eight-week covered period self-employed individuals, independent and... 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