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Treasury Issues New Guidance on SBA Loans for Self-Employed


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Treasury Issues New Guidance on SBA Loans for Self-Employed

Yesterday afternoon, Tuesday, April 14, 2020, the Treasury issued a new interim final rule with additional eligibility criteria and requirements for the Paycheck Protection Program (PPP) for self-employed individuals.

Here are the key takeaways:

  1. Those individuals with self-employment income who filed or will file a Form 1040 Schedule C for 2019 are generally eligible for a loan.
  2. The new guidance directs that the self-employment income of partners in a partnership may be reported as payroll costs, up to $100,000 annualized, on a PPP loan application filed by or on behalf of the partnership (or LLC filing taxes as a partnership). Individual partners may not submit a separate PPP loan application as a self-employed individual.
  3. The loan amount for self-employed individuals will be calculated based on 2019 Form 1040 Schedule C net profit. If the 2019 return has not yet been filed, the 2019 Form 1040 Schedule C must be filled out to compute the value. If the self-employed individual has employees, the self-employment income and the wages of the employees will be considered in the calculation of the loan amount in one single application.
  4. Regarding the Forgiveness Provision for individuals with self-employment income, forgiveness of owner compensation replacement for individuals with self-employment income who file a Schedule C will be calculated as eight weeks’ worth of 2019 net profit.

Aprio will provide additional updates and guidance as they become available. If you have immediate questions, please contact your Aprio Relationship Partner or contact us here.