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Paycheck Protection Program Update

After the commencement of the Paycheck Protection Program (PPP), the funds were quickly accounted for. Thus, on April 21, the Senate approved House Rule 266 to replenish the PPP with an additional $310 billion. This additional amount will raise the total amount of the PPP from $349 billion to $659 billion.

House Rule 266 also provides for another $100 billion to the Department of Health and Human Services’ Public Health and Social Services Emergency Fund.

Lastly, the Federal Register published supplemental rules regarding self-employed individuals ability to utilize the PPP. You are eligible for a PPP loan if: (i) You were in operation on February 15, 2020; (ii) you are an individual with self-employment income (such as an independent contractor or a sole proprietor); (iii) your principal place of residence is in the United States; and (iv) you filed or will file a Form 1040 Schedule C for 2019.

However, if you are a partner in a partnership, you may not submit a separate PPP loan application for yourself as a self-employed individual. Instead, the self-employment income of general active partners may be reported as a payroll cost, up to $100,000 annualized, on a PPP loan application filed by or on behalf of the partnership. Partnerships are eligible for PPP loans under the Act, and the Administrator has determined, in consultation with the Secretary of the Treasury (Secretary), that limiting a partnership and its partners (and an LLC filing taxes as a partnership) to one PPP loan is necessary to help ensure that as many eligible borrowers as possible obtain PPP loans before the statutory deadline of June 30, 2020.

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