PPP Forgiveness for Independent Contractors and Sole Proprietorships | What You Need to Know

If I decide to only use the 25% to pay my rent will that amount be forgiven?

Thank you very much for clarifying a murky subject, especially for us sole props. I was terrified that I could be on the hook for several thousand dollars if I didn't do my accounting just right...now I know it's totally manageable. You are providing all of us with a tremendous service and I am very grateful :-)

Hi Oscar. Thank you very much for the info! May i ask you a question. I'm self employed without any employees. I'd like to apply for PPP. After I fill out the PPP application what should I do next? How will i find a lender? My bank unfortunately doesn't handle PPP loans. Do i need to call all the local banks? Thank you.

Is there an annual cap on the amount a sole proprietor can claim (i.e. $100,00.00 annually) as the basis on which their 8 week compensation is based? They calculated our loan a greater amount and it seems as though if that is the case we will need to pay back a large sum

Absolutely amazing. Thank you for clearing this up for me!! Can you use any of this money on supplies/parts or software for your business?!

I'm an indie contractor that has a negative on line 31 of my 1040c. I spent more on my business than I made in 2019, how do I calculate my loan amount?

Hi
How about the new law that is easing PPP loans forgiveness period? It is now 24 weeks instead of 8 weeks. Does this mean it is totally forgiven now?

Hi how about the partnership with no employees for the forgiveness part? Thank you

What happens if your lender followed early guidance for independent contractors and calculated your loan amount based upon 1099-MISC receipts (capped at $100K) plus the cost of self employed health and dental insurance? Are they now retroactively being asked to calculate forgiveness based upon that borrowers typically significantly lower Schedule C net profit, and no self employed health/dental cost? This would result in a large discrepancy in the automatically forgivable owner compensation replacement amount.

Thank you! Very informative. I wasn't sure if writing myself a check was necessary.

Can anyone recommend banks that accept these application? Chase isn't accepting any application, period. Bluevine need 941s, I've tried some small locals and they have all said no if we're proprietor or Partnerships. June 30th deadline is stressing me out.
THANKS

Question: Can a Single Member LLC / Sole Proprietor with ZERO FTEs in 2019 hire a temporary employee to count towards the PPP Payroll expense during the 8 or 24 week period, especially if that employee is paid through a PEO or Payroll service that will send a W-2 (not an independent contractor getting a 1099)??

HI! My questions is that am I able to get this loan AND get unemployment benefits? My accountant says I am..

Does the 8/52 calculation change now that they've extended it to 24 weeks? 24/52?

I am reading all about LLC and Sole Proprietor. What about S-Corps? No employees, just my husband and I.

Thanks Bench Accounting for a great video. Are sole proprietorships now eligible for 10 weeks of compensation automatically forgiven since the PPP Flexibility Act extended the cover period from 8 weeks to 24 weeks?

Question. I have a personal and savings acct. Can I write a check from my personal to my savings acct and note it as owners compensation? Is it necessary to open a business account if I plan on just accepting the forgivable $15k as an independent contractor. Also, should I write one amount for the 8 wks total or pay myself weekly? Thanks!

Thank you for this video, there doesn't seem to be much info out there for self employed PPP and this was wonderfully informative.
If 2019 taxes have not been filed yet do we use the schedule C from 2018? Also wondering about owner Compensation, does that need to show as being drawn out weekly as an Independent Contractor (Realtor)?

For self employed individuals they made you cap salary at $100,000. Important details my friend, important details......

I strongly echo most of the comments below. This was incredibly helpful, clarifying, and easily digestible. Thank you!

Does independent contractor like Uber or delivery driver needs to provide naics code for PPP loan? Thank you

This is so helpful, thank you kind sir!

Man, the amount of the PPP loan I can keep is miniscule because I wrote my income off in 2019 to avoid heavy taxation. I really had hoped to use the money to put into internet and lead generation advertising, but from the sound of this, it does nothing for me other than about $2k of a $15k loan. Guess I'll be giving most of it back since my office is in the back corner of our bedroom.

I am a sole proprietor with no employees currently receiving unemployment via PUA and that is working good.However that program will be over in July (I believe ) I have a email from SBA saying I can apply for loan (I guess it will be a PPP loan) But I think I have to do it before the end of this month. My main question is if i stop my PUA before i receive any PPP funds will that allow me to being considered as to be not double dipping?

The PPP for regular payroll was a Minimum of 75% to Payroll (which I think has been changed to 60%) but that was a minimum, you could pay it all to payroll and have it forgivable. Is this the same case with the 8 weeks for Sol Props? Meaning, is 8 weeks a minimum and I can pay 100% of the loan to myself? or is the 8 weeks for Sol Props a maximum, unlike the 75% (changed to 60%) for Companies with Payrolls. I know that you can pay 100% of Corp Payroll of PPP and get forgiven, so just curious if same applies... Why would I pay it back, if I can pay it all to myself and be forgiven 100%? Thank you in advance for your answer!

This is great info! I wonder if it's still accurate...hoping it is. Question my 2019 Schedule C was only reflecting a net income for 4 months as I was a new business. Do I just adjust the calculations based on 4 months rather than 12?

Fantastic video, thank you! Q - what about misc. business expenses? Can they be used to forgive the 2 week remainder of the loan, above the 80% Owner Comp. Replacement? TIA!

Does an LLC created in 2020 without previous 2019 net pay, qualify for a PPP?

Thank you

Thanks this is great information. I have just put in for the PPP, yet I'm a little confused about this and my Unemployment. NY worked out my UI on my W2s only, I have a letter stating this and I am struggling to get this changed, hence applying for the PPP. When I claim UI each week, and it asks me if I worked, it tells me to exclude any 1099 income. Others I have spoken to who are on PUA, it does ask them to enter your 1099 income. Because my UI was worked out on my W2 and it tells me not to report any 1099 income, what are your thoughts about this and if I can do the PPP and still collect my UI which is super low due to my low W2 income. Thx

OMG I just found this today, THANK YOU! Finally, someone is looking out for us self employed folks thank you!

Thanks. Amount Automatically Forgiven = (2019 Sched C Line 31 Net Profit) / 52 weeks x 8 Weeks

I am a sole proprietor with 2 employees. My loan was based on 3 employees (myself included). Our employees are paid hourly and they do not have regular hours so their payroll is always different. 1 employee made over $100k last year, but the first quarter of 2020 averages out lower. The second employee is considered a FTE, but works sporadically based on business and his first quarter is not full-time wages. What do I base the payment on for the employees? What do I base the 75% of payroll on for an employee who never works 40 hours?

How do I submit my forgiveness application?

Is this information still accurate?

Thanks for clearing up sole props....with new EZ form how do we show this calculation?
Also can we add money put into IRA during time frame?

I'm a sole prop, got my PPP late June , was told I had up to 24 weeks to use it. So I used it to pay myself for my living expenses (I ended up closing my office space till covid is gone) and to be cautious about extra unnecessary expenses. Does the 8 weeks rule still stand or is there another option for cautious and frugal people like me?

My loan disbursement was on 05-07-2020 but I started paying not until 08-07-2020 paying weekly as I used remaining funds from my business to keep my business running. Using 24-week pay window, what kind of pay period would SBA categorize this as? I know I should not have waited until 08-07-2020 to use the PPP money but is there a way I can get forgiveness with this. I have payroll docs (paper check) to support this. How can I apply for forgiveness with this situation? Thank you so much.

What if you had a meg income

What if I have a NOL?

Thanks much!!

First vid that wasnt fluff on subject after watching 10+

Still Confused!! On jan 28th Brendan Tuytel from bench accounting in his article stated that for a sole proprietor, no employees, loan less than 150k, %100 of the loan was forgiven as owner compensation replacement as long as you elect the 24 week period. From your conclusion at the end of your video=2019 sched c income divided by 12 then multiply by 8 for forgiveness.
not understanding what I am missing. ( Also to make it more complicated, I am a seasonal business with no payroll and elected to take any 12 week period to determine the amount of the loan.-never see any info on seasonal businesses.)

Disreguard comment below, i see this is an old video linked to a new release

Thanks!

Is it too late to claim this? What if you weren’t working as an independent contractor in 2019 and started in 2020?

I started as an independent contractor on 1/1/20 so I don't have a 2019 schedule C. Can I use the 2020 to calculate it?

Ok I have a serious question my ex was working a 9-5 job in 2019 he started a trucking company last August 2020 he applied for the PPP loan as a sole prop and was approved for 2 separate $20,000 loans he’s didn’t have a business in 2019 is he in trouble??