SBA Releases NEW PPP Loan Calculation Formula Rules for Self Employed & Schedule C Filers
SBA releases the official rules on how the new PPP loan calculation formula for the self-employed, independent contractor, sole proprietor, and all Schedule C filers. This is good news since the banks have been waiting on SBA guidance on how this new PPP loan formula for self-employed was going to work.
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Hello from Freedomtax Accounting. We are an accounting firm where we have been providing quality tax and accounting services now for over 20 years. Good news for the self-employed, independent contractors, sole proprietors, basically anyone who files a Schedule C and wants to apply for a PPP Loan. The SBA has published their official rules on how this new PPP Loan calculation is going to work. So this is good news because now the sole proprietors, independent contractors, self-employed are going to be able to get a higher PPP Loan amount.
So since last week, since the Biden Administration released the information that they wanted the SBA to increase or change the way the PPP Loan formula was going to work for self-employed, we have been waiting on SBA to come out with official guidance. And today is the day that the SBA finally released it.
Before I show you, I want to thank everyone that has prayed for me, that has told me to get better because they know that I had been having a sore throat for the last couple of days. I still am talking a little funny but I want to thank everyone for sending your prayers this way. Really, really appreciate it. OK?
So basically, this is the interim final rule that the SBA published today. I’m going to be honest, I haven’t read it. So this is going to be my homework for tonight. But I am going to put a link to this interim final rule from the SBA in the description of this video so that way, you can also read it for yourself.
So this is the official rule on how this new PPP Loan is going to be calculated for the self-employed. So this is good because now the banks have their rules on how to implement this and they can now change their systems in order for the self-employed to apply.
The good thing is, this is the new application form. OK? And at least, one question was answered and it is, are we going to use Line 1 or Line 7 of the Schedule C to apply for the PPP for the self-employed? Now clearly, it says it is going to be Line 7. So at least we have that answered.
So now, the self-employed, independent contractor, sole proprietor, your PPP Loan calculation is going to be Line 7 of your 2019 or your 2020 Schedule C and you are going to divide that by 12. Well, it’s going to be up to $100,000. So if your Line 7 is $125,000, you’re only going to take $100,000. You divide by 12 and you multiply by 2.5.
So once again, the new PPP calculation formula for self-employed, independent contractors, sole proprietors is Line 7, Schedule C up to $100,000, divide by 12, multiply 2.5 and that’s going to be your PPP Loan amount.
Now, what’s going to happen if you already got PPP, if you can get the difference, that’s my homework for tonight and I really hope that I see it in the 32-page document that they released tonight. OK?
We just wanted to let you know this is good news. We are going to put a link in the description of this video to the document so you can start reading it. And we are going to put more videos this week for more details. OK?
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