Ppp Loan And Unemployment For Self Employed

How Much Can A Self

The maximum amount for a PPP loan is 2.5 times your average monthly payroll costs. Income listed on a Schedule C in your personal tax return is the only payroll that can be used to calculate your PPP loan amount. If youve hired 1099 workers, they cannot be included in your PPP loan calculation and may apply for their own PPP loans.

How To Calculate A Ppp Loan If Youre Self

• Retrieve your Schedule C from either 2019 or 2020. If youre using 2020 to calculate your payroll costs and have not yet filed your 2020 return, you can fill out your 2020 Schedule C and calculate the value.
• Choose the number youll use to calculate payroll. This will either be gross income or net profit . If the amount is greater than $100,000/year, reduce to $100,000/year. If neither number is greater than $0, you do not qualify for a PPP loan.
• Take that number and divide by 12 to calculate your monthly payroll costs.
• Multiply the monthly total by 2.5.

How Do You Apply

Unemployment insurance: You must apply for unemployment through your states unemployment insurance office. Many states are overwhelmed with unemployment filings, so applying via your states online system is probably a better option than applying by phone. For tips on how to file your claimincluding a detailed list of what youll need for the applicationcheck out our Guide to Unemployment Benefits and Eligibility.

PPP: While these loans are federally backed by the Small Business Administration, you must apply for them through a bank or other lender. If you already have a relationship with a lender, start there if not, you can search for participating lenders in your area on the SBA websitebut be aware that large banks and credit unions might not take new customers.2

Read Also: Do You Have To File Taxes For Unemployment

Sole Proprietors And The Ppp

If you run a business on your own, your business is a sole proprietorshipâ even if you havenât formally let the IRS know.

Since you donât have employees, you wonât be reporting your payroll costs for the PPP loan. Instead, youâll be reporting your gross business income, which will be reported on line 7 of a Schedule C . As long as your business was operational prior to February 15, 2020, you can apply to the Paycheck Protection Program.

You will need to provide a Form 1040 Schedule C for either 2019 or 2020, depending on which year you used to calculate your loan amount.

If youâve already filed your taxes, this should be easy: just submit a copy of your filled-out Schedule C to your lender. If you havenât filed your taxes yet, you will need to get retroactive bookkeeping done so you can calculate your gross income and fill out your Schedule C properly.

If you donât have bookkeeping or a tax return, we strongly recommend that you get caught up with your bookkeeping. Without a payroll service, bookkeeping is the best way to determine your net profit as a sole proprietor .

Your monthly average payroll expense will be your annual gross profit divided by 12. If your annual gross profit is over $100,000, you may only claim up to $100,000 divided by 12.

Further reading:Gross Profit vs. Net Profit: Understanding Profitability

**Sole proprietors with payroll expenses

Sole proprietors who are married

Sole proprietors with more than one business

Criteria Needed To Rent

Regardless of where you decide to rent, theres a high likelihood that your new landlord will have stipulations or requirements that youre required to meet prior to signing a rental agreement. Criteria will vary for every landlord or property owner, but were providing a basic outline from Gran Inc. Below outlines rental criteria for Colorado renters:

• Valid Identification
• Verifiable rental history of no less than six months. This might include a written lease agreement or a month-to-month agreement.
• Employment history of at least three months with the current or previous employer.
• Monthly income at least 2½ times the monthly rental amount.
• Criminal history with no felony or misdemeanor charges. Criminal history must be disclosed on the rental application.

Also Check: Unemployability Va Form

You May Like: How To Apply For Unemployment In Nc

Can You Use Help Paying Rent And Utility Bills

If you have rent and utility bills to pay, the PPP allows you to use a portion of the money you receive to pay for those costs. So not only do you get funds to pay employees for 24 weeks, you can get money to pay for some of your other expenses.

If you choose to lay off employees instead of using the PPP, you wonât get that extra money to help you pay those bills.

How Is An Sba Loan Different From A Traditional Business Loan

Now that youre more familiar with SBA loans, you can probably start to see the differences between them and traditional business loans, but lets go ahead and highlight them.

Unlike an SBA loan, traditional business loans are not backed by the government, meaning theyre harder to qualify for. Since theres more risk on the lender, you can expect them to place a heavy emphasis on factors like your credit score, cash flow, and annual revenue.

Since SBA loans are less risky for the lender, you can expect lower interest rates than with conventional loans.

Other key differences are the loan amount as well as the loan term. SBA loans offer longer loan terms, spanning from 5-25 years, whereas business loans are shorter. The loan amount on an SBA loan is up to $5 million, unlike business loans which often range from $25,000 to $250,000.

Don’t Miss: Who To Contact For Unemployment Issues In Michigan

Assistance For Providers Enrolled In Medicare

The Centers for Medicare & Medicaid Services announced expansion of its accelerated/advance payments program to a broader list of suppliers, including audiologists and SLPs, during the COVID-19 pandemic. This opportunity could help clinicians offset some of the financial impact they are experiencing.

About The Contractor Self Employed Ppp

The Biden administration changed the way the Small and Medium Business Administration’s Paycheck Protection Program calculates loans allowed for small businesses and sole proprietors. The SBA provided some information on how the loan formula will change, but still provides lenders with details on how the loan will be calculated under the new rules.

The Paycheck Protection Program aims to maintain workers’ salaries, and now it is also open to approximately 26 million US sole proprietors who pay themselves through payments. This will give SMEs access to permissible loans to cover their salaries and wages within eight weeks of signing. Banks and alternative lenders manage the application of this program.

Read Also: How Do I File An Unemployment Claim Online

What Can You Use Your Ppp Funds For

Paycheck Protection Program Vs Unemployment As A Sole Proprietor

As a sole proprietor, you can apply for either the PPP or unemployment benefits . Here are some things to consider before you send in your application.

How much will you be paid?

Both the PPP and unemployment provide major benefits, but which will provide you the most funds? You should do some studies and basic arithmetic to determine what will put you in the perfect situation. The PUA minimum benefit is 50% of the states average weekly UI benefit.

In New York, for instance, the highest benefit rate is $504, which is the same as the highest benefit rate for routine unemployment benefits. Because unemployment benefits have always been taxable income, you might also consider how much state and federal tax will be levied on your funds.

If you have any work coming in and the potential to make a little money in the coming months, the PPP might be a wiser choice. Working and garnering income will have no effect on the sum you obtain from the PPP, and you will still be capable of receiving 2.5 times your monthly payroll cost.

However, if you are obtaining unemployment benefits and continue to work part-time, your benefits may be whittled down. As a result, consult your state agency to figure out how much your unemployment check would be whittled down if you continue to work.

You May Like: Can You Get An Auto Loan On Unemployment

Who Qualifies For Income

Because median income levels vary by states and local areas, income requirements for income-restricted housing differ as well. Every year, HUD calculates the median income for each metro area in the country. It then determines the maximum income, based on family size, that qualifies as Low,Very Low, or Extremely Low for that metro area.

In many cities, income-restricted housing is limited to those whose income is Very Low for that area, with preference given to those with Extremely Low income. However, if your income is considered Low, its worth seeing if any local programs are available to you.

Other factors that are considered include how many people will be living in the household, U.S. citizenship status, and eviction history.

New Ppp Changes Could Benefit Some Self

So far in 2020, Mississippi lenders have extended nearly an additional $1 billion in PPP funds to our states small businesses and new loans

The Paycheck Protection Program is a loan designed to provide a direct $600 Federal Pandemic Unemployment Compensation weekly benefit?

Outlines PPP loan eligibility requirements for self-employed under state laws commonly referred to as the State Unemployment Tax Act or

Recommended Reading: How To Sign Up For Unemployment In Kentucky

Search By Type Of Program

There are three main types of affordable rental housing that are supported by HUD:

• Privately owned, subsidized housing in which landlords are paid by the government to offer reduced rents to low-income tenants. Search for an apartment and apply directly at the rental management office.
• For complaints about subsidized housing, call the Multifamily Housing Complaint Line at .

If you have trouble contacting your local public housing agency, contact your local HUD field office for help.

If youre a landlord, learn how you can participate in the Housing Choice Voucher Program.

How To Use The Contractor Self

The contractor self-employed PPP loan has specific guidelines for using it over other SBA loans. Especially if you are looking for 100% loan forgiveness. But during the COVID19 crisis, the usage was relaxed to maximize the impact of aid.

How to use and not use your contractor self employed PPP loan:

You May Like: Can You Overdraft Unemployment Card

Template For Printing A Job Application

Employers frequently utilize an employment application to evaluate candidates. This provides detailed information about the applicants qualifications, experience and experiences. A typical employment application will inquire about prior employment, education, and references. There will also be questions on current or previous jobs. A lot of states have laws which regulate what information can be written on these forms. Here are a few examples of employment application forms. They can be found online or download them onto your personal computer.

The two-page, free application for employment is designed to collect basic information from prospective employees. It has fields for names, address addresses, email address, and number. You can also include information about education, diplomas, and other qualifications that are relevant, as well as your professional experiences. The template contains data that will help you swiftly and effectively evaluating the qualifications of every applicant. A template in hand can make it much easier for your applicants to complete the application precisely.

Loan Forgiveness Ppp For Self

Jesus Morales is an Enrolled Agent and has 7 years of bookkeeping and tax experience. He enjoys hiking, traveling, and studying tax law.

Jesus Morales is an Enrolled Agent and has 7 years of bookkeeping and tax experience. He enjoys hiking, traveling, and studying tax law.

The Paycheck Protection Program is a loan created to give small businesses an incentive to retain their employees during the COVID-19 pandemic that could be forgiven if used for payroll, business mortgage interest payments, rent, or utilities. While they usually have no employees, the self-employed, freelancers, sole proprietors, and independent contractors are still eligible for PPP loans and loan forgiveness.

The PPP loan program was included in the Coronavirus Aid, Relief, and Economic Security Act passed in March 2020. The act appropriated $349 billion for forgivable loans to assist small businesses by helping them maintain their payroll and pay some of their overhead during the pandemic.

The deadline to apply for a PPP loan was in August, but in December 2020, Congress began discussions on a new COVID-19 relief bill that is expected to provide additional PPP loans . The measure is still being negotiated and the terms for PPP2 have not been finalized. Here is how to get loan forgiveness PPP for self-employed workers.

Contents

Read Also: How Do You Qualify For Unemployment

So What Do You Recommend

It is possible that Congress or the federal Department of Labor will address this issue through amendment or waivers. In the meantime, we recommend that you apply for benefits through IDES, include all your sources of work-related income, including 1099 work. You should receive benefits based on your W-2 work, as well as the additional $600 in weekly benefits provided by the CARES Act. You should then file an appeal with IDES within 30 days of the benefit determination, arguing that you’re entitled to additional benefits based on your 1099 work. Two of our fellow Chicago legal services organizations, CARPLS and Legal Aid Chicago, can assist you with the appeals process.

Do You Need Help With Other Expenses

The PPP can be used to cover some other expenses for your business besides paying yourself and employees, like rent and utilities. If you need help with these expenses, the PPP is a better option for you than unemployment. 60% of the PPP must be used toward payroll for it to be forgiven, but the other 40% can be used for rent, utilities, health insurance for employers and employees, business expenses, operating costs and property damages.

You can learn more about the latest PPP news, lenders and distribution with the Skip App, which you can download at TrackPPPLoan.com. We will even have partner lenders right on the app starting next week.

Disclaimer: This is for illustrational purposes only and not to be construed as tax, accounting, or legal advice. Work with your lender further if you have questions.

Don’t Miss: How To Get Health Insurance When Unemployed

How To Apply For Ppp Loan Forgiveness As A Self

Youll work with your lender on your PPP loan forgiveness application. They should have sent you follow-up information on how to submit your forms and paperwork. Youll need to submit this application within 10 months of the end of your covered periodif not, your loan payment deferment will end, and youll have to start making monthly payments on your PPP loan.

After you submit your application, your lender will review your documentation and get back to you within 60 days. Once approved, the SBA will refund the portion of your loan that was deemed forgivable.

FAQs

asdfad

Housing Choice Voucher Eligibility

Your local public housing agency decides if you are eligible for a Housing Choice voucher based on:

• Your annual gross income
• Whether you qualify as a family, a senior, or a person with a disability
• U.S. citizenship or eligible immigration status
• Your familys size
• Other local factors

In general, your familys income may not exceed 50% of the median income for the county or metropolitan area.

Each state or city may have different eligibility rules for housing programs. Contact your local PHA to learn about your eligibility for Housing Choice vouchers.

Recommended Reading: How To Claim Taxes On Unemployment

Tips For Handling Joblessness

• Consider working with a financial advisor who can build you a solid financial plan and help you invest for the future. SmartAssets free tool matches you with financial advisors in your area in five minutes. If youre ready to be matched with local advisors who will help you achieve your financial goals, get started now.
• If underemployment or unemployment related to COVID-19 has made you unable to make payments on credit card debt or a mortgage, heres how to protect your credit score.

Dont Write Off Your Home Buying Plans Because You Lost Your Job

Low interest rates are making home affordability more attractive for many Americans whether theyre first-time homebuyers or existing homeowners who want to move or refinance.

While unemployment income can stifle your homeownership plans, all hope is NOT lost. Speak with a few mortgage lenders about your specific situation.

Theres still time to join millions of other homeowners whove already taken advantage of an incredibly hot real estate market.

Popular Articles

Resources

Recommended Reading: How To Fight Unemployment Claim Denial

How Much Of Your Ppp Loan Will Be Forgiven

Under the the terms of the Paycheck Protection Program Flexibility Act that became law in June, self-employed individuals such as freelancers , independent contractors, and sole proprietors who took out a PPP loan are ensured that their loan will be fully forgiven if they qualify.

To qualify for forgiveness, your business must have been harmed by the pandemic. If you are operating a business without employees, you must certify that it was could not operate from February 15, 2020, until the end of the period covered by the loan at the same level of business activity it had previously been operating at because the business was complying with work or customer safety requirements related to COVID-19. You must also meet the following requirements:

• You filed, or will file, a 2019 Form 1040 Schedule C that shows you received self-employment income.
• Your business was in operation on February 15, 2020.
• Your primary residence is located in the United States.

The amounts that will be forgiven are those used to either pay your compensation or salary as the business owner or cover non-payroll expenses, including the following:

• Utilities for the business, such as electric, water, cable, and internet
• Mortgage interest for mortgages on business property that were closed before the pandemic
• Required business services that support your services or product production.