For Schedule C businesses with no employees you get to use the new Form 3508EZ which is pretty simple. Paycheck Protection Program First Draw Borrower Application Form for Schedule C Filers Using Gross Income If you’ve hired 1099 workers, they cannot be included in your PPP loan calculation and may apply for their own PPP loans. Can I re-apply for a financial loan if we came back my first one? Paycheck Protection Program (PPP) EZ Loan Forgiveness Application Form. 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. Recent PPP rules updates benefit workers and contractors who file a Schedule C (Form 1040) Uber, Lyft, Doordash, Postmates drivers: max loan calculation how-to; How app-based drivers should spend their PPP loans to get loan forgiveness; What is the PPP loan forgiveness process like for Uber, Lyft, and Doordash drivers? 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 . Divide that Step 1 amount by 12 to get your average monthly net profit/gross income. Before the SBA releases guidance it is unclear what time frame shall be properly used for the calculation. Draw PPP Loan forgiveness application), or (b) ... forgiveness amount (PPP Schedule A, lines (6) and (7)). If you fit this description, you are eligible for loan forgiveness: Up to 2.5/12 of 2019 net profit as reported on IRS Form 1040 Schedule C Line 31 A PPP Loan Forgiveness Checklist. 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 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. 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. less than your loan amount, and you have business related interest, rent, lease or utility expenses, these expenses may be forgiven, too. 3. 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. 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. There are lots of rules to achieving total forgiveness, but here are the most important ones to keep in mind: ... How to Apply for PPP Loan Forgiveness as a Self-Employed Worker. $100,000. 1. forgiveness. Form 1040 Schedule C Businesses. Question. 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. Usually these are Sole Proprietors, Independent Contractors and owners of Single Member LLC’s. For PPP loan forgiveness, you need to use the funds on payroll, rent, mortgage, and utilities to qualify. Federal Contracting. You may. The SBA issued an IFR today on Schedule C borrowers using gross income for PPP loans. The SBA includes sole proprietors, self-employed individuals, and independent contractors in their definition of Self-Employed Schedule C or Schedule F Filers. 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 Who gets automatic PPP Loan forgiveness. Borrowers who file IRS Form 1040 Schedule C, Schedule F or Schedule K-1 If you received your PPP Loan in 2020: • If you filed an IRS Form 1040 Schedule C or Schedule F for 2019, you must upload it with your supporting documents. If your PPP loan (or 2nd Draw PPP loan) amount is $50,000 or less, you are exempt from FTE and wage maintenance requirements. If you do this, you will need to maintain full employment at full salary to maintain the maximum forgiveness amount. The U.S. Small Business Administration, in consultation with the Treasury Department, on Thursday released a simpler loan forgiveness application for Paycheck Protection Program (PPP) loans … PPP loans have a covered period of 24 weeks. Please complete these steps to apply for loan forgiveness at any time: Locate your 2019 Schedule C, Schedule F, or Form 1065. 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. 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. 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. Your PPP loan and its forgiveness for “compensation” are capped at $15,385 under the eight-week covered period or at $20,833 under the 24-week covered period. Paying Myself. 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. How much am i able to claim? Business Guide. If you report your business income and expenses on Schedule C of your Form 1040, your PPP loan forgiveness is straightforward, as you see in the four answers below. You will use this document to determine Owner Income Replacement on the application. Anyone who applied for their loan using their Schedule C can file for automatic forgiveness. 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. at $15,385 under the eight-week covered period; or at $20,833 under the 24-week covered period. Author: Harmony Kolling, CPA. The cap amounts are computed using your net profit from line 31 of your 2019 Schedule C. Funding Programs. 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. 2. Please click here for guidance regarding the PPP loan eligibility and forgiveness provisions for those with Schedule C income.. 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. There is a place for PPP forgiveness in the 1120S and 1065, but not Schedule C (yet). Self-Employed Schedule C or F Filers. The maximum amount allowed is $20,833. By Bill Cunningham . Presumably contractors that are independent the self-employed will nevertheless qualify according to 2.5 months of web revenue from the Schedule C taxation kind. 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 Under this new rule, Schedule C filers could earn loans for as much as $20,833. From your 2019 or 2020 Schedule C, use the lesser of: a. The IFR waives the restriction that prevented business owners with non-financial fraud felony convictions in the last year as well as business owners who were delinquent or in default on their federal student loans from applying for the PPP Loan. There is suppose to be a line for nonconforming states, but it hasn't been implemented yet. Paycheck Protection Program (PPP) EZ Loan Forgiveness Application Form. 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. How to complete Form 3508S for Self-Employed Individuals with no Employees. This may apply to sole proprietors, self-employed individuals, independent contractors and some single-member LLCs. b. Here are the main points on full loan forgiveness for self-employed people up to $20,833. Skip to main content. If you obtained your loan proceeds before June 5, you can elect to use the eight-week period to spend your PPP loan proceeds. This is a blog on how to apply for Program Protection Program (PPP) loan forgiveness Form 3508S for self-employed individuals with no employees. Your choice of your net profit (line 31) or gross income (line 7) (Note: If both are zero or less, you are not eligible for a PPP loan.) Your PPP loan and its forgiveness for “compensation” are capped. 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. Later, the PPP was opened to sole proprietors who report income on Schedule C filings instead of via payroll. Menu. 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: The PPP loan was based on your 2019 Schedule C net income / 12 * 2.5 months. So 2.5 months of profit was your PPP loan amount. COVID-19 relief options and additional resources: LEARN MORE. Multiply the Step 2 … I would expect that you should be getting 100% forgiveness. Learning Platform. 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