After the initial funds for the Paycheck Protection Program (PPP) were depleted last week, Congress began negotiations on a fourth stimulus bill to provide additional funding. The Senate passed a bill yesterday that provides an additional $300 billion for PPP loans, and the bill is expected to be voted on by the House tomorrow, Thursday, April 23rd. If passed and signed into law, the PPP loans will be issued on a first come, first served basis, making it important for small businesses and self-employed individuals to gather documents, prepare applications, and continue working with their lending officers to ensure applications are filed as soon as possible.
As the available funds underpinning the forgivable loan program ran out late last week, the SBA finally issued additional PPP guidance for independent contractors and self-employed individuals. This supplement to the Interim Final Rule, issued earlier this month, provides much needed clarification for independent contractors and self-employed individuals, as well as additional guidance for general partners.
The message here is simple. If you are a partner or general partner, do not file a separate loan application. Only the partnership is entitled to apply for a PPP loan.
The SBA guidance allows for up to $100,000 of annualized self-employment income of general active partners to be included as wages in the PPP application filed for the partnership. While the guidance does not define a general active partner, we expect the intent is to exclude mere investors and other limited type partners who are not active participants in the partnership.
Are you a self-employed individual?
How do you calculate the maximum PPP Loan?
2019 Schedule C Net Profit (not less than $0 or more than $100,000)
Eligible Expenses for Loan Forgiveness
Assuming the fourth stimulus bill becomes law, it may not be too late to submit a PPP application. It is expected that any new funds will be depleted as fast, or faster, than the original PPP funding. With that in mind, ATKG strongly encourages clients to contact their banker and ATKG representative right away to apply. ATKG promises to keep you informed of any legislative changes.
Visit the ATKG Coronavirus newsroom for a complete listing of articles released by ATKG addressing the fast paced changes occurring in the US as a result of the COVID-19 pandemic.
|David Higginbotham is a Senior Manager with ATKG. He received his Bachelor of Business Administration in Accounting from The University of Texas at San Antonio. He is a firm believer of supporting his community and the public accounting industry. As a result, David currently serves on the Board of Directors for the Texas Society of Certified Public Accountants San Antonio.|
For further information on this topic or other tax questions please contact David at 210.733.6611 or email@example.com.
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