While Congress works through the issue of providing additional funding to the depleted PPP, the SBA continues to issue new guidance on the program. In a long awaited update, the latest guidance fleshes out issues related to self-employed borrowers, including rules for eligibility, calculating the loan amount and loan forgiveness. Here are some important takeaways:
1) Schedule C filers ARE eligible for PPP loans if they have or will file a Form 1040 Schedule C for 2019;
2) Partners of partnerships are not eligible for a PPP Loan as self-employed individuals, but rather as a loan taken by the partnership for payroll costs;
3) The loan of a self-employed individual is calculated differently – depending on whether they do or do not employ other individuals (details are provided in the interim rule);
4) Documentation: Schedule C filers will have to submit Form 941 and state quarterly wage unemployment insurance tax reporting forms (or something equivalent from the payroll company) for the covered period. Any non-payroll costs will also have to be supported with documentation.
Additional guidance is expect to be issued to clarify remaining issues.For now, the interim final rule is linked here: https://home.treasury.gov/…/Interim-Final-Rule-Additional-E…