New PPP Loan and Employee Retention Credit Guidelines
In a recent article on PICPA’s CPA Now, Anthony Montanaro and Kevin Wilkes discuss the recent PPP changes and updated employee retention guidelines.
A preview of the article is below.
On March 3, 2021, the Small Business Administration (SBA) issued an Interim Final Rule that changed the PPP loan calculation methodology for IRS Form 1040, Schedule C, taxpayers. The change allows qualifying Schedule C taxpayers (e.g., independent contractors, sole proprietors, or self-employed individuals) to calculate the maximum loan amount using gross income. Previously, these borrowers were required to use 2019 or 2020 Schedule C net profit as the basis for computing the maximum PPP loan. The changes apply to both first and second draw loans. The new methodology only applies to loan applications submitted after March 3, 2021. Borrowers who already received PPP loans are not permitted to amend their loans to take advantage of the new methodology.
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