At a minimum, you'll need payroll documents and tax statements. Bank statements, receipts, purchase orders and canceled checks may also be required.
Over the course of those ten weeks, 10% of your PPP loan is going to transfer right back into your personal account. This way you can use the funds and show you've paid yourself over ten weeks or 2.5 months.
To qualify for a PPP loan, self-employed individuals must meet the following criteria: ... You are an independent contractor, sole proprietor, or other qualifying business classification with self-employment income. In 2020, you filed a Schedule C or Form 1040. Your primary place of residence is the United States.
To do this you'll need your 2019 Form 1040 Schedule C, as well as a 2019 IRS Form 1099-MISC detailing non-employee compensation, invoices, bank statements, or a book of record that proves you are self-employed. When you apply for forgiveness, you'll provide that same 2019 Schedule C to your lender.
To prove payroll costs you'll need to provide:
Federal payroll tax filings (IRS Form 941) Income, payroll, and unemployment insurance filings from your state. Receipts for employer contributions to group benefit plans. Receipts for any retirement plan contributions.
Gross receipts include all revenue in whatever form received or accrued (in accordance with the entity's accounting method) from whatever source, including from the sales of products or services, interest, dividends, rents, royalties, fees, or commissions, reduced by returns and allowances.
If you got a Paycheck Protection Program loan during the first draw, your deadline for applying for forgiveness is August 30, 2021. The applications for forgiveness are made through your lender or through the PPP Loan Forgiveness Portal opened by the Small Business Administration.
Independent contractors can submit a PPP loan application through their bank or a lending marketplace. ... 1099 employees are now eligible to apply for their own PPP loans through their banks or a loan marketplace.
Forty percent or less of the loan can go towards other eligible expenses, including business mortgage interest payments, business rent or lease payments, business utility payments, covered operations expenditures, covered property damage costs, covered supplier costs and covered worker protection expenditures.
The PPP limits compensation to an annualized salary of $100,000. For sole proprietors or independent contractors with no employees, the maximum possible PPP loan is therefore $20,833, and the entire amount is automatically eligible for forgiveness as owner compensation share.
First Draw PPP Loan If You Have No Employees
(If you are using 2020 to calculate payroll costs and have not yet filed a 2020 return, fill it out and compute the value.) If this amount is over $100,000, reduce it to $100,000. If both your net profit and gross income are zero or less, you are not eligible for a PPP loan.
This major bank is continuing to accept online PPP loan applications in anticipation of the SBA program getting more money. To apply, you must have a business checking or small business savings account with Capital One as of February 15, 2020.
SBA Loans. There are several different small business loans for sole proprietors backed by the Small Business Administration and offered by a variety of lending institutions. The most popular is the 7(a) program, which can be secured for up to $5 million, depending on your qualifications.
The instructions for Form 1120S provide that the tax-exempt income from the forgiveness of PPP loans should be reported on Line 16b of Schedule K, Form 1120S and Schedule K-1 of Form 1120S.
You are an employee of your business, so you can use your loans to pay yourselves.
Whether a PPP loan fraud case involves thousands, hundreds of thousands, or millions, defendants can receive prison sentences in these cases. If there is evidence of fraud, people can go to jail for a $20,000 PPP loan, just like someone whose PPP loan was $100,000 or $1 million.
PPP Money – Nearly All Gone: Only $8 billion remains available. Source: CBS News, April 6, 2021.
If you don't apply for loan forgiveness within 10 months after the last day of your covered period, you'll be required to start making payments to your PPP lender at 1 percent interest, which started accruing when the loan was made.
IMPORTANT UPDATE FOR 2021:
Congress approved an extension of the PPP loan program until June 30, 2021, including “second draw” PPP loans for businesses that received PPP funding in 2020. ... In late December 2020, Congress passed a bill approving a re-funding of the PPP and EIDL programs under the CARES Act.
Generally, PPP funds can be used for four purposes: payroll, mortgage interest, rent/lease, and utilities. Payroll should be the major use of the loan. The second stimulus bill also introduced four new categories of expenses that are allowed.