Paycheck Protection Program (PPP) for Independent Contractors

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Brian Beasley
Paycheck Protection Program (PPP) for Independent Contractors

The Paycheck Protection Program (PPP) allows lenders to offer low-interest loans that may be 100% forgiven in certain circumstances. Independent contractors and self-employed individuals that have been adversely impacted by the COVID-19 pandemic have been eligible to apply for these loans since April 10, 2020.

  1. Are independent contractors eligible for PPP?
  2. Can a 1099 employee get a PPP loan?
  3. Can a self-employed person apply for PPP?
  4. How do independent contractors get PPP forgiveness?
  5. How do independent contractors apply for PPP loan forgiveness?
  6. Do 1099 employees count for PPP forgiveness?
  7. Who qualifies for a PPP loan?
  8. How does PPP work self-employed?
  9. Can I apply for PPP if my business started in 2020?
  10. Can self-employed get PPP and unemployment?

Are independent contractors eligible for PPP?

1. Am I eligible? 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.

Can a 1099 employee get a PPP loan?

Independent contractors can submit a PPP loan application through their bank or a lending marketplace. ... PPP applications opened for 1099 employees on April 10, 2020. 1099 employees are now eligible to apply for their own PPP loans through their banks or a loan marketplace.

Can a self-employed person apply for PPP?

You can apply for a PPP loan as a self-employed individual once applications open for the 1,800 qualified SBA lenders.

How do independent contractors get PPP forgiveness?

For independent contractors, sole proprietors, and other self-employed workers, you can have eight weeks of your loan proceeds automatically forgiven as salary replacement. This should amount to 75% of your PPP loan, assuming you took the maximum amount available to you when you applied.

How do independent contractors apply for PPP loan forgiveness?

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.

Do 1099 employees count for PPP forgiveness?

“Do independent contractors count as employees for purposes of PPP loan forgiveness? No, independent contractors have the ability to apply for a PPP loan on their own so they do not count for purposes of a borrower's PPP loan forgiveness.”

Who qualifies 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.

How does PPP work self-employed?

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.

Can I apply for PPP if my business started in 2020?

Your business must have been in operation as of February 15, 2020 in order to apply for a PPP loan. ... However, due to the nature of your new business, you can calculate your loan amount based on your average average total monthly payroll costs incurred from January 1, 2020 to February 29, 2020 and multiply that by 2.5.

Can self-employed get PPP and unemployment?

Self-employed folks and independent contractors can now qualify for unemployment and those unemployment benefits have been given a boost with an extra $600 in benefit payments for 13 weeks. ... You can get money from the PPP or unemployment, but not both.


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