Information for Self-Employed Individuals or Independent Contractors
How do I know if I’m self-employed or an independent contractor?
If you file your business as a Schedule C on your individual return and not as an S-corp or Partnership.
How is the amount determined for eligibility?
Payroll Protection Program (PPP)
Monthly payroll amount will be based on the gross income on their most recently filed tax returns or any 1099s. The loan size is equal to 2.5% your monthly payroll costs.
For independent contractors, payroll costs include: wages, commissions, income, or net earnings from self-employment, capped at $100,000 on an annualized basis for each employee. This amount is capped at $10 million.
The exact language of the bill states that payroll costs include: “the sum of payments of any compensation to or income of a sole proprietor or independent contractor that is a wage, commission, income, net earnings from self-employment or similar compensation that is not more than $100,000.”
Economic Injury Disaster Loan (EIDL)
The primary criteria for approval is an acceptable credit history and an ability to repay the loan.
What amounts can be forgiven?
Payroll Protection Program (PPP)
All amounts used toward payroll costs, mortgage interest, rent and utility payments over the 8 weeks after getting the loan will be forgiven. It is expected that not more than 25% of the forgiven amount may be for non-payroll costs. You will also need to keep the number of staff and payroll salaries at the same level as before February 15th. You have until June 30th, 2020 to restore any changes.
Economic Injury Disaster Loan (EIDL)
Applicants can request a grant of up to $10,000 that does not need to be repaid, even if your EIDL loan is rejected.
What information is needed to apply?
Payroll Protection Program (PPP)
The PPP application will go live on Friday, April 10, for independent contractors and self-employed individuals. You will need to submit the application and payroll documentation (2019 return, 1099’s and other payroll costs including benefits).
For PPP forgiveness, you will need documentation that you kept employees and made eligible mortgage interest, rent, and utility payments.
Economic Injury Disaster Loan (EIDL)
The loan application is already available here. You will need gross revenues, cost of goods sold, lost rents (for rental property owners), and the number of employees. Direct deposit information will also be needed to request the emergency grant.