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ARTICLE · 10 MAY 2020

Paycheck Protection Program: Rules For Self-Employed Persons Issued

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On April 14, 2020, the Treasury Department issued its third formal Interim Final Rule related to the Paycheck Protection Program (PPP).

United StatesEmployment and HR
Frank L. Washelesky, CPA, JD, CVA, PFS
Frank L. Washelesky, CPA, JD, CVA, PFS
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On April 14, 2020, the Treasury Department issued its third formal Interim Final Rule related to the Paycheck Protection Program (PPP).  

Major items that have been clarified in this notice are detailed below:

  • Self-employed individuals who file a Schedule C for their business as part of their individual income tax return will base their compensation on the net profit reported on their 2019 Schedule C, capped at $100,000 per year. A Schedule C borrower with no employees that earns in excess of $100,000 will be eligible for a PPP loan of $20,833 (2.5 x $100,000/12). 
  • The $100,000 per employee cap on compensation for the computation of forgiveness during the eight-week benefit period is specifically calculated at 8/52 of $100,000. An employee earning more than $100,000 per year will be limited to $15,385 of eligible compensation when computing the amount of PPP loan eligible for forgiveness.

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