How Does PPP Work For Independent Contractors?

How do I get PPP loan forgiveness as an independent contractor?

To apply for PPP loan forgiveness, self-employed individuals can use the simplified Form 3508EZ.

As long as you don’t have employees on payroll, this form applies to you.

If you do have payroll expenses, you can use the standard Form 3508..

Can contract labor be included in PPP?

Payments that businesses make to independent contractors and self-employed workers are not payroll expenses that qualify for Paycheck Protection Program (PPP) loans. However, independent contractors and sole proprietors themselves are small businesses who can qualify for the loans.

When should I apply for PPP forgiveness?

You must apply for forgiveness within 10 months after the end of the ‘Covered Period. ‘ which is the 24-week period that starts when you received your PPP loan. The lender (i.e. your bank) has 2 months to process your loan forgiveness application then SBA has three additional months to approve your forgiveness.

Can independent contractors apply for PPP?

You are eligible to apply for a PPP loan as an independent contractor or self-employed individual who has been or will be harmed by the pandemic if all of the following are true: … You filed or will file a Form 1040 Schedule C for 2019 showing self-employment income.

What documents are needed for PPP forgiveness?

Before you decide which application to use or start collecting documents, below is a list of standard information needed to begin the process.Business Legal Name (“Borrower”) DBA or Tradename, if applicable.Type of Tax Return.Business Address.Business TIN (EIN, SSN)Business Phone.Primary Contact E-mail Address.More items…•

When can independent contractors apply for PPP?

Independent contractors receiving 1099-MISC forms and self-employed individuals are eligible to apply for these potentially 100% forgivable loans beginning on April 10, 2020.

How do I apply for PPP forgiveness?

To apply for forgiveness of your Paycheck Protection Program (PPP) loan, you (the Borrower) must complete this application as directed in these instructions, and submit it to your Lender (or the Lender that is servicing your loan). Borrowers may also complete this application electronically through their Lender.

When can I apply for PPP forgiveness?

The Paycheck Protection Program opened up for applications to most businesses on April 3 and for self-employed individuals on April 10. Many businesses have used up their initial PPP loan and are ready to apply for forgiveness.

How do I get my self employed PPP forgiven?

The amount of Owner Compensation Replacement you’re eligible to claim for forgiveness is calculated by multiplying your reported net income in 2019 on your Schedule C by 2.5/12 (or 0.208). This is essentially your entire PPP loan, assuming your loan amount did not factor in additional payroll expenses.

Can I use PPP to pay myself?

Under the PPP, your payroll expense can include your salary expenses and health insurance premiums. … Since you can use the PPP funds to pay yourself through the Owner Compensation Replacement, you’ll be considered to be fully covered during the 8-week covered period if you use that timeframe.

What qualifies you for a PPP loan?

Who Qualifies for a PPP Loan? Any small business with 500 or fewer employees may be eligible. This includes small businesses, S corporations, C corporations, LLCs, private nonprofits, faith-based organizations, tribal groups and veteran groups.

Does a self employed person qualify for PPP?

The SBA’s guidance makes clear that partners with self-employment income from partnerships are not eligible for PPP loans as self-employed individuals. Instead, the self-employment income of a general active partner is reported as a payroll cost of the partnership.