SBA Issues Additional Guidance on Self-Employed Paycheck Protection Program Loans

On April 14, 2020, the U.S. Small Business Administration issued a new interim final rule that provides further guidance on several key areas of uncertainty surrounding the Paycheck Protection Program (PPP). We’ve highlighted the key areas of this new guidance below.

  • Guidance on loan amounts and how loan forgiveness will be calculated for individuals with self-employment income, both with and without employees. The 2019 Form 1040 Schedule C is required to be provided with the PPP loan application, as well as additional detailed documentation.
  • Directs that the self-employment income of general partners may be reported as a payroll cost, up to $100,000 annualized, on a PPP application filed by or on behalf of the partnership (and LLC filing taxes as a partnership). Individual partners are not permitted to submit a separate PPP loan application as a self-employed individual.
  • The guidance addresses the eligibility issues of certain business concerns and requirements for certain pledges of PPP loans.

The SBA stated it will issue additional guidance for those individuals with self-employment income who: (1) were not in operation in 2019 but who were in operation on Feb. 15, 2020, and (2) will file a Form 1040 Schedule C for 2020.

The SBA has created an FAQs page on the PPP loans and is being updated periodically as things change.

Our BMF Advisors stand ready to help with questions on PPP loans, disaster and business interruption loans or other answers you need to keep your business moving forward.


Visit our COVID-19 Resource Center for information and resources for you and your business.

About the Authors

James E. Merklin
James E. Merklin
Partner, Assurance and Advisory


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