The PPP First Draw Loan Amounts Guide provides comprehensive information on how various business entities including self-employed individuals, partnerships, corporations, non-profits, and tribal businesses can calculate their loan amounts based on their 2019 payroll costs. The guide also outlines the necessary documentation required for each type of business, which may include forms such as 2019 1040 Schedule C, 2019 941s, or other relevant documents. Additionally, the guide offers instructions for entities operational on 2/15/2020 but not on 2/15/2019, as well as clarifications on additional expenses that can be included in payroll costs. The guide serves as a useful resource for those navigating the PPP loan application process.
PPP First Draw Loan Scenarios and Requirements
Self-employed with No Employees
- Use 2019 form 1040 schedule C, line 31 (net profit amount)
- Calculate average monthly net profit amount
- Multiply the average monthly net profit amount X 2.5
Required Documentation includes:
- 2019 1040 Schedule C
- 2019 form 1099-MISC
- 2019 1099-K
- 2019 invoices
- Bank statement
- Book of record establishing self-employment status
- 2020 invoices
- Bank statements
- Book of record reflecting operating on 2/15/2020
Self-employed with Employees
- Compute 2019 payroll costs by adding various components
- Calculate average monthly payroll cost amount
- Multiply the average monthly payroll cost amount X 2.5
Required Documentation Includes:
- 2019 1040 Schedule C
- 941 and state quarterly wage unemployment insurance tax reporting
- Documentation of any retirement, group health, life, disability, vision, and dental contributions
- Payroll statement or similar document dated 2/15/2020
Self-employed Farmers and Ranchers
- Use 1040 schedule F
- Use same calculations as above
- Use same additions and subtractions as above
Required Documentation Includes:
- Same as for 1040 Schedule C filers
Partnerships
- Compute 2019 payroll costs using specific calculations
- Calculate average monthly payroll costs
- Multiply average monthly payroll costs X 2.5
Required Documentation Includes:
- 2019 1065, including K-1s
- 2019 941s
- State & local quarterly unemployment insurance forms
- Records of any retirement or group health, life, etc., insurance contributions
- Proof of operational status on 2/15/2020
S and C Corporations
- Compute 2019 payroll costs based on specific criteria
- Calculate average monthly payroll costs
- Multiply average monthly payroll cost X 2.5
Required Documentation Includes:
- 2019 form 941 for each quarter
- 2019 1120 or 1120-S or other documentation
- Payroll or other statement reflecting operation on 2/15/2020
Non-profits
- Compute 2019 payroll costs by adding specific components
- Calculate average monthly payroll costs
- Multiply average monthly payroll X 2.5
Required Documentation Includes:
- 2019 form 941s for each quarter
- State quarterly wage unemployment tax reporting form
- 2019 form 990 or other supporting documents
- Payroll record or other document supporting operational status on 2/15/2020
Eligible Non-profit Religious Institutions, Veterans’ Organizations, and Tribal Businesses
- Compute 2019 payroll costs by adding specific components
- Calculate average monthly payroll costs
- Multiply average monthly payroll costs X 2.5
Required Documentation Includes:
- 2019 form 941
- State quarterly wage unemployment tax reporting form
- Documentation for any retirement or group insurance contributions
- Payroll record indicating operational status on 2/15/2020
Miscellaneous Questions
LLCs and Other Entities
- Use the instructions provided based on their tax filing status
Documentation for Payroll Costs
- W-2s, W-3s, or payroll processor reports
- 941, 943, or 944 forms
Entities Operational on 2/15/2020 but Not 2/15/2019
- Options for filing and required documentation
Self-employed or Partnership Operational on 2/15/2020 but Not in Operation Between 2/15/2019 and 6/30/2019
- Options for filing and required documentation
Additional Expenses Included in Payroll Costs
- Information on other categories of expenses that can be included
Question & Answer
How can self-employed individuals calculate their PPP First Draw Loan Amount?
Self-employed individuals can calculate their loan amount by using their 2019 form 1040 schedule C, line 31 (net profit amount), calculating the average monthly net profit amount, and multiplying it by 2.5.
What documentation is required for self-employed individuals with no employees applying for the PPP loan?
Required documentation includes 2019 1040 Schedule C, 2019 form 1099-MISC, 2019 1099-K, 2019 invoices, bank statement, book of record establishing self-employment status, 2020 invoices, bank statements, and book of record reflecting operating on 2/15/2020.
How should partnerships calculate their PPP First Draw Loan Amount?
Partnerships should compute their 2019 payroll costs using specific calculations, calculate the average monthly payroll costs, and multiply it by 2.5.
What documentation is required for S and C Corporations applying for the PPP loan?
Required documentation includes 2019 form 941 for each quarter, 2019 1120 or 1120-S or other documentation, and a payroll or other statement reflecting operation on 2/15/2020.
