Thanks for all your help!! For Sole Proprietors... once a deposit is made, what are the next steps to ensure everything is well documented? What papers are they looking for if the person is essentially paying themselves? Because, sole proprietors are needing to use this money to pay bills, survive, pay business expenses, etc. I guess that is what is lost in translation on all these videos on RUclips. A guide on spending the PPP and tracking funds to ensure that the forgiveness is successful. What documents are they looking for and receipts? Thanks so much
[10:21 AM PST] @TaxesbyKatie.com Hey Erica, The whole point of this form (3508S), is to make forgiveness easy for small business owners. All you need is for 60% to be used to pay yourself. No need to submit documentation (you do have to have it in case they request it). But to answer your questions: Generally, PPP funds can be used for: payroll, mortgage interest, rent/lease, utilities, work protection expenses, supplier costs. Self-employed individuals can pay themselves with PPP funds by claiming their owner compensation replacement. Their entire PPP loan is potentially forgivable. The best way to track your PPP spending is to deposit the funds into a separate account (your business) account and make transfers to your personal and mark them as owner compensation replacement. I've got other videos on how to track your funds, what the funds can be spent on, etc... But that's not the purpose of 3508S...... To your larger point, I do see a huge need for a few videos on general business advice for new small businesses. I'll try and get those out after tax season. Thanks for the input.
@@KatieStOresCFPChFCEA so should I put 60% as owner compensation should be okay to put in forgiveness app? Yes, I pay office rent, utilities. And in the part of total forgiveness amount, put the whole loan funded amount correct?
@@ChristianYepez @TaxesbyKatiec.com Hey Christian, Yes, you can assign 60% of your funds as owner compensation replacement and allocate the rest, 40% to eligible expenses. The total amount of your loan should be forgiven.
[10:46 AM PST] @TaxesbyKatie.com Hey Jeramy, That's a new question for me. A W-2 contractor is an individual who is issued a Form W-2 by a temporary work agency, but who works as a contractor for a client of the agency. In the work environment, a person can be classified as an employee or a contractor. Since it can go either way, you have to clear that with the SBA directly. Here is their contact number. You can contact the SBA's Answer Desk by e-mail answerdesk@sba.gov or by telephone at 800-827-5722.
Wao! Thank you so much for this info! I was asking myself how am I gonna apply for forgiveness if I'm self employed with no payroll, no employees. Basically this is an AUTOMATIC FORGIVENESS 100% assuming that the SBA is just checking your 1040 and not inquiring what you did with the money.
Katie St Ores CFP, ChFC, EA haha I love it! There’s so much fluff out there on RUclips about “fReE monEy apply NOW!” It’s just so refreshing to hear the real details from a smart, wise woman like yourself. And especially the way you walked us through the form. I will be subscribing and checking back when I need your help!
Katie, thanks so much for this, very helpful, it provided great information, same as a video you did last year when the first PPP launched. So, you have stated that we can choose whichever period we want - 8 weeks, 24 weeks or, per latest rules, anything in between. But, does SBA actually CARE which one it is? I paid myself weekly based on the 2.5 calculation, 10 weeks, and then went back on unemployment. Am I better off then putting 10 weeks? If I put 24 weeks could that trigger anything, in addition to the fact that I went back on unemployment/PUA? On the other hand, previous to the new rule, 24 weeks would have been the only option for me anyway, right, so doesn't matter? Thanks again!
[12:31pm PST] @TaxesbyKatie.com Hey Broddy, It makes no difference for SBA whether you choose 8 weeks, 24 weeks or anything in between as long as you stay in this time frame, and use your PPP loan proceeds as required. Regarding PUA and PPP, they are not compatible with each other. While you can apply for both programs, you cannot collect funds from both programs at the same time.
Thanks Katie for your explaining PPP loan forgiveness very detail step by step. I have a question. I received a loan on 08/11/2020 and haven't applied for a loan yet. Can I still be eligible to apply for the first draw PPP loan? Is it the deadline July 31st 2021 ?
[10:13am PST] @TaxesbyKatie.com Hello Alan, You already received your first draw on 08/11/20 as you said yourself. So, you would apply for the second draw now. The deadline for submitting applications is May 31, 2021 however, the first week of May, the major lenders ran out of money unless you qualify as a special exclusion group. So, apply at a local community bank or credit union since all the large lenders are out of money but the little guys still have funds left.
Hi Thanks for this video. I am filling out the forgiveness form it says it must match your application, but I have moved. Kabbage has my old address prefilled in. Will it mess up the process if I put my new address? Worried that any changes will cause an issue. Thanks
[12:41pm PST] @SaintOres.com Hello Marlo, Try to contact Kabbage directly. They should be able to update your address on file. Their phone number for PPP Loans: 855-669-1549.
Hi Katie, Thanks for great video and instructions. My questions are in 2 part. Thanks in advance!!! 1) Do you know if we can send the Form 3508S directly to SBA? I have a heck of time dealing with Bank Of America as they have no incentive to do the forgiveness which they will no longer getting that 1%. 2) Is there a service company that takes the Form and process for you?
[10:13am PST] @TaxesbyKatie.com Hello John, Here is the SBA guidance.... Complete this SBA Form 3508S in accordance with the instructions below, and submit it to your Lender (or the Lender that is servicing your loan). 2) I'm sure there are service companies out there but I don't know any. I've heard that people have had better customer service thru smaller lending institutions. But that's too late for you now. Good luck.
Hi Katie, I am a gig worker with no other employee. I received my fund from the first drawer of $6,400 on 6/24/21. How much do I pay myself weekly? If I choose the 8 weeks to cover period. When is the first payment I pay myself? When is my last payment? Do I just use $6400/8=$800 weekly to pay myself for 8 weeks? Thank you.
[11:41am PST] @SaintOres.com Hey TG, Since you are a sole proprietor without employees, it will be best to choose 11 weeks covered period, IF you are using the whole amount towards owner compensation replacement. Your covered period starts on the day you received your PPP loan amount and you can start paying yourself right away.
@@KatieStOresCFPChFCEA I heard from all over the place, the cover period I'd 8 week or 24 weeks or 8 weeks to 24 weeks, which one is it, very confused.
Hey Crystal, Womply is an intermediary, not your lender. You're lender should be on your correspondence of the loan. Depending on who your lender is, they will probably have an online version of this form.
Thank you very much beautiful for your advice and the good work! I received the email this morning and I sent the request right away . I have a question please , I got the second PPP loan last week am I eligible to get the EIDL Loan increase too ? Be safe out there
[9:32am PST] @TaxesbyKatie.com Hey Lakbir, The SBA said at the end of March that the borrowers who previously received funds should not submit a request for an increase; instead, SBA may contact these borrowers regarding their eligibility for an increased loan amount. You may have to clear that with the SBA directly. Here is their contact number. You can contact the SBA's Answer Desk by e-mail answerdesk@sba.gov or by telephone at 800-827-5722.
Hello! I am a sole proprietor with no employees. Filed and received $20,833 on April 14th. My covered period for 8 weeks is 4/14-6/8/21. I have already transferred the funds from my business to personal account in one lump sum for 100% used on owners compensation on 4/16. Does this mean that I can now apply for forgiveness?
Katie your Fabulous! I totally understood Katie's Video but then I read the comments (open 2 new bank accounts and 60% can be my payroll) I just got my 1st PPP loan (funded today) I'm a Independent contract (Licensed with a EIN number) No employees I received $5700.00 today my funds will be gone by 6/14/2021 or before so I would apply for PPP1 loan forgiveness by 6/14/2021 (fill out the form etc) as soon as the funds are gone? then I can apply for the 2nd PPP loan? The comments about the opening 2 new bank accounts if you choose the 24 week option would not pertain to me right? Then I can apply for the 2 PPP loan as soon as my 1st PPP funds are gone? Thank you in Advance :)
[4:53pm PST] @TaxesbyKatie.com Hello Susan, The SBA guidance says that you can apply for the 2nd Draw when your funds are gone, or are about to be gone. (There are a couple of other requirements, but that is the main one). So if your funds are about used up, you can apply. Use the 8 weeks if it works out better for you. Sounds like it would if you have no employees.
Hi Katie! My lender is asking me to use my 2020 return for 2nd draw & I'm a bit confused, PLS HELP!!!! .... So, I've received my first draw and used my 2019 return(schedule C Line 7). My question is...When applying for the 2nd draw ppp.. Can I use my 2019 Return(Schedule C line 7) Again, for the same loan amount?
[10:43am PST] @TaxesbyKatie.com Hey Natasha, Under the new rule, you can use your gross profit amount from Line 7 if have no employees. You should be able to use your 2019 or 2020 tax return for the second draw. You would use this video for the 2nd Draw using Schedule C line 7. ruclips.net/video/bBiaLQviN9A/видео.html
Hello Katie thank you so much for this video. My question is as independent contractor after I filled out a paper should I add a document and prouve for everything I used a money for? And also where should I send a form ? To SBA or my lender? Thank you for everything
Hey Hort, You submit your forgiveness application to your lender. Find out if they have an online version to make it easiler to submit. For loans up to $150,000, generally, you don't have to submit documentation with the application. However, depending on your lender requirements, they may require documentation to support your request and SBA may ask for additional documentation as part of its review of any PPP loan. Whether or not supporting documentation is required to be submitted, you should keep all records relating to your PPP loan, including a copy of IRS 1040 Schedule C for the year that was used to calculate your loan amount, receipts, canceled checks, or account statements verifying that money was spent on eligible expenses.
I am an attorney who has worked alone out of a home office for 20 yrs. I am confused about whether I count as an employee or not. I received a first and second draw PPP loan. On the first one the lender gave me a loan amount based on my gross income figure on Sched. C, even though I think they should have used the net income figure. On the first loan forgiveness App., do I just use the net income amount divided by 12 times 2.5 and pay back the rest? And on the second one the Gross income amount from Sched. C divided by 12 times 2.5? That should equal the entire amount of the second loan. Should I use the same form for both loans? Which one? Sorry for the length.
[9:42am PST] @TaxesbyKatie.com Hey Paul, You can use Form 3508S to apply for forgiveness for both draws. However, you should fill out two separate forms, one for each draw. On the second item, you should contact your lender and clarify that net/gross calculation issue.
[1:07pm PST] @TaxesbyKatie.com Hello Haseeb, You'll want to get it back to your lender. If your lender is local, drop off the application. If you have an online lender, they may want you to email it or maybe they have an online version of the form to my it easier for you.
I am an independent contractor. I recieved 20,833 on Thursday, April 1, 2021. It says that expenses can include payroll to myself, rent, and utilities. You are only talking about payroll to yourself in this video. I am going to use the loan to pay that but also to pay rent (1500 per month) and utilities (ext. at $140 per month). I will have proof that I spent the entire loan on these three items. How do the rent and utilities factor into the forgiveness?
[12:59 PM PST] @TaxesbyKatie.com Hey John, You can use the loan to pay your rent, utilities, operations expenditures-any software, cloud computing, supplier costs, any personal protection equipment, or property improvements to remain COVID compliant. Just make sure you spend at least 60% on the payroll and on qualified expenses to get 100% forgiveness.
Awesome video...I did the 10 weeks of pay but still have remaining funds. I based my funds on my weekly pay from PPP first draw since the loan was based on the same 2019 schedule C. What do I do with the remaining funds..small loan under 10K so should be fully forgiven? Do I pay myself past the 10 weeks? I am in independent contractor. Thanks
[10:23am PST] @TaxesbyKatie.com Hey Coach, For sole proprietors with no employees, the maximum possible PPP loan is $20,833, and the entire amount is automatically eligible for forgiveness as owner compensation replacement. You can pay yourself as a one lump sum payment or you can spread it out over 8 to 24 weeks. It just states that the covered period can't be less than 8 weeks or longer than 24 weeks.
HI Lena, thank you for shedding light on this topic . Am self employed and I do hair braiding with no employees but have not yet registered my business with the city. Pls can you tell me if my ppp loan can be forgiven if I apply . thanks. pls reply
Great information, easy to follow. My loan came directly from SBA not from a bank. Can I still file for a loan forgiveness? If so, where do I mail the application.
[9:52am PST] @SaintOres.com Hey Aly, Then you will have to submit the forgiveness application to the SBA. Contact the SBA and ask them what is the best way to submit the application. Here is their contact number. You can contact the SBA's Answer Desk by e-mail answerdesk@sba.gov or by telephone at 800-827-5722.
Hi Katie. I just received my first draw deposited 5/14/2021 as a sole proprietor with no employees. How soon would you suggest I apply for forgiveness? I paid myself 100% of funds for payroll with check deposited into separate account.
[9:32am PST] @TaxesbyKatie.com Hey Marques, You can apply for forgiveness any time up to the maturity date of the loan. If you do not apply for forgiveness within 10 months after the last day of the covered period, then PPP loan payments are no longer deferred. So it is a good idea to apply as soon as your covered period ends and you used up all of your funds.
As an independent contractor with no employees, why would I put 1 employee? This doesn't make sense if I used the loan for owner compensation. Am I wrong?
[1:02pm PST] @SaintOres.com Hey White, I wish I could answer that for you. That's a question for the bureaucrats who wrote the policy for the program. You can contact the SBA forgiveness line at 877-552-2692 and clarify that question with them.
Thank you for your time. Very helpful. I don't have any employee and got 19,280 that was calculated from line 7 schedule C. Is the whole amount considered my payment and already spent since it is in my account?
[12:36pm PST] @TaxesbyKatie.com Hello Hope, I also posted this in your other comment. Since you don't have employees and the amount is under 20,833, it is considered Owners compensation replacement when it's in your personal account.
I am a sole proprietor with no employees.. I am going through Womply fast lane so I have received my first ppp loan and will hopefully sign docusign for second ppp loan soon. So, the ppp loans will be only about 2-4 weeks apart. How do we file for forgiveness when the funding date is so close together for the loans? I know we put the date the funds are deposited for ppp 1 and then wait 24 weeks to apply for forgiveness. For ppp2, that timeline will overlap if we get second funds deposited just weeks after the first loan. How do we deal with this when applying for forgiveness?
Hi Katie, if someone applies for their first draw of PPP in 2021 using 2020 tax returns and is approved (in this example 2020 income is higher), will they be able to file for forgiveness using that same tax return? The time stamp I added suggests that it's based on whichever income is lower - which in this example, would mean that the loan would not be forgiven? I hope this makes sense. Thanks in advance! @10:09
[10:12 AM PST] @TaxesbyKatie.com Hey Ryan, You are using the same base documentation for the forgiveness application that you used to apply for the loan. If you used the 2020 tax return for the loan, numbers used from that specific year are used to calculate the loan amount. You are using the same year's return for forgiveness.
@@KatieStOresCFPChFCEA I am a bit worried because I got my first ppp loan April 16 and I checked my bank account and had the 2nd PPP deposited on May 5th. So not sure if it will be forgiven.
@@crystalsierra1153 [10:33am PST] @TaxesbyKatie.com I don't think you have to worry. It seems to me that the SBA wants to make the PPP loans and forgiveness as easy as possible to the most amount of people.
Hi Katie! I received the first PPP loan but I have not worked since 2019. I have no income for 2020. Can I apply for the second PPP? If so what income would I use? Thank you for your videos. The information that you give is very informative.
@@KatieStOresCFPChFCEA Hello again Katie! Thank you for your response. But just a few more questions. I just got my first PPP at the end of March. Can I apply for the second now? Or is there a time line for applying?
Thanks for the video. I'm a sole proprietor and was awarded a PPP loan for 20k on March 2021. I'm a US citizen (currently in another country on a business assignment since 2018). I was planning to return to the US in June where I would have utilized the PPP loan proceeds. But now, the country I'm currently at is experiencing a new Covid outbreak and there will be long delays in getting vaccines for foreigners. Will this cause issues with the SBA concerning the US being my "principal place of residence?" I'd planned to spend the PPP funds when I returned to the US. I want to make sure that a "force majure" situation like this does not lead to scrutiny. Thank you for your help.
[1:43pm PST] @TaxesbyKatie.com Hey Dom, Considering the uniqueness of your situation you should try reaching out to the SBA directly. Here is their contact number. You can contact the SBA's Answer Desk by e-mail answerdesk@sba.gov or by telephone at 800-827-5722.
Since I filed a schedule C for independent contractor and since I qualify for 100% loan forgiveness do I still need to show myself paying myself?? I don't have employees which means I can keep the whole amount im rather confused as to how and if I need to show that im paying myself. My funds were deposited in to my regular checking account. I have no business account because the owner pays me thru checks. Need help understanding if I still need to pay myself the full amount in lump sum?? Since I automatically qualify?
[9:42am PST] @SaintOres.com Hey William, Yes, in your situation you can pay yourself the whole PPP loan amount as an owner compensation replacement (lump sum or weekly). This is to compensate you for a loss of business income. To take the full amount of owner compensation share, you will have to use a covered period of at least 11 weeks. Many sole proprietors don't have a separate business account, that is OK. But if you have another personal checking account, you can transfer that money just to keep it separate.
I'm uber driver, since the irs doesn't consider me a w2 worker, I can't use the loan funds to pay myself correct? Can I just assume the money is mine and spend on whatever I want? And have it forgiven based on the calculation of line 7 of my schedule c?
[1:43pm PST] @TaxesbyKatie.com Hey ED, Since you are an independent contractor without employees, you can essentially use the whole loan amount as an owner compensation replacement. And it is eligible to be forgiven.
What documents should I need? My portal I’m doing my application on is asking for tax for 941 for paying taxes for paying myself that doesn’t seem right .. I took it for owners compensation
Hi Katie, this video was so helpful! I do have a question - I received funds using my net income- some CPAs are saying under the old rules (using net income), it is neccessary to wait 24 weeks before filing for forgiveness, even if you spend it all in 2 and a half months -which some folks are recommending in order to receive the full amount. Can I still file for forgiveness at two and half months (and receive 100% forgiveness)? Or do I need to wait the 24 weeks before I file?
[5:19 PM] @TaxesbyKatie.com Hey J.... If you spent all funding on forgivable expenses and have the correct documentation to submit to your lender, you can apply for loan forgiveness at any time-even before your “covered period” expires. However, your covered period can't be less than 8 weeks. You can pick 8 weeks, 24 weeks or any date in between.
If following for owner compensation can you pay your self for 11 weeks and be forgiven for 11 week time frame or does it have to be 8 or 24 weeks only?
@@ambermays6473 [9:42am PST] @TaxesbyKatie.com Hey Amber, You may select any covered period between 8 weeks and 24 weeks, which starts upon disbursement of the PPP loan proceeds.
[10:05 AM PST] @TaxesbyKatie.com Hello Higaad, There is no fixed deadline to apply for PPP loan forgiveness. PPP loans have a covered period of 8 to 24 weeks after the funds hit your bank account. Once that covered period ends, your loan payments are deferred for 10 months. At the end of the 10 month deferral period, you have to start making monthly payments with loan terms of 1% interest on a 2 to 5 year term. Therefore, it’s best to apply for forgiveness before this payment deferral period ends. The supporting documents in your cases may include: Copies of canceled checks Bank statements with ACH information
@@KatieStOresCFPChFCEA quick follow up can the business owner with just 1099 workers apply for themselves? Also how can you show a 25% loss in gross receipts? Can PUA show that?
@@THEHIGAADINSTITUTE [3:41 PM PST] @TaxesbyKatie.com Hey HIGAAD, Contractors should not be included in payroll calculations for PPP loans. They are considered their own businesses under the PPP. PUA is not included in your gross income calculation.
@@KatieStOresCFPChFCEA final question: how does a contractor show loss of 25%? For example, many of my cleints have taken 2-3 months off from March-May 2020. Since there is no paystubs would they show their bank statements for PPP 2 forgivness? Your answers are very much appreciated!
[5:53pm PST] @TaxesbyKatie.com Hello Karen, You'll want to get the forgiveness application back to your lender. Sometimes they have their own online version of the official form that was in the video. It depends on the lender.
@Yeye Jean [10:33am PST] @SaintOres.com Hey Yeye, If you don't know your lender (you must have a lender to get the PPP), call the SBA. They will able to tell you who issued your loan and then send the application directly to that lender. Try to contact the SBA's Answer Desk by e-mail answerdesk@sba.gov or by telephone at 800-827-5722.
Hello, I received my first draw and I’m looking into forgiveness as a sole proprietor. I seen you said I can apply for forgiveness 8-24 weeks. Does that mean I have to wait at least 8 weeks to apply for forgiveness? Also I seen one payment to myself for lost wages would be enough because I’m only going for the first draw
[4:23pm PST] @SaintOres.com Hey Jay, The SBA tells you to choose a minimum of 8 weeks, a maximum of 24 weeks, or anything in between. It is best to wait until your covered period is over to apply for forgiveness. As long as you stay in this time frame, and use your PPP loan proceeds as required, you should be fine. If you are a sole proprietor without employees, you can pay yourself weekly or make a one lump sum payment, which usually depends on the amount.
@@KatieStOresCFPChFCEA My first draw was $20,800 & so basically you’re saying it’s best I wait 8 weeks or so to apply for forgiveness? I was just going to pay myself in one lump sum also , I’m just trying to make sure i understand how long i have to wait to apply for forgiveness.
[4:53pm PST] @SaintOres.com Hey Jay, You can pay yourself in a one lump sum payment or you can spread it out over 11 weeks for example. It just states that the covered period can't be less than 8 weeks or longer than 24 weeks. There is no deadline to apply for PPP loan forgiveness. Once that covered period ends, your loan payments are deferred for 10 months. At the end of the 10 month deferral period, you have to start making monthly payments with loan terms of 1% interest on a 5 year term. Therefore, it’s best to apply for forgiveness before this payment deferral period ends. No one will reach out to you, you have to apply and start the forgiveness process yourself.
So if i filed for ppp under my social and it was deposited into my personal checking account. How do i go about forgiveness if i basically can’t pay myself?
Hello Jahmill, Not too much more you have to do as far as paying yourself. The money deposited was what the PPP calls Owners Compensation Replacement. As long as the amount was less than $20,833.
@@KatieStOresCFPChFCEA So when the funding is deposited into my personal checking, I don’t need to write a check or transfer it else where? I am receiving 20,832 ($1 less than 20,833) Just making sure I don’t need a paper trail or proof that I used at least 60% into payroll or eligible expenses In other words once it is deposited I just need to apply for the forgiveness for the full amount (20,832) under “Owner Compensation” Thank you so much in advance and for the uploads!
@@vlm3030 [12:55pm PST] @TaxesbyKatie.com Hello Victor, I like the $20,832. Yes, you are correct. No need to transfer it anywhere else. When you applied for the loan, you affirmed the fact that the loan was used for the appropriate purpose. So the SBA doesn't require any paperwork for forgiveness, unless they request something in the future. The SBA is bending over backwards to make the whole process as painless as possible for small businesses.
Hi Katie and thanks for your videos. As a sole proprietor / independent contractor, I have no employees. I applied last month for PPP2 (my first time applying for PPP). I was approved and received a max loan. My question is about Owner Compensation Replacement, applying for full loan forgiveness, and the number of weeks I am allowed or required to make the payments to myself out of the loan total. It is not clear to me if by using the loan for Owner Compensation Replacement I must show that I am using the loan to compensate myself weekly over 8 weeks or over 24 weeks - or over a period of my choosing that between 8 and 24 weeks. Payments to myself over 11 weeks will obviously provide a greater cash flow sooner than weekly "payments" spread over 24 weeks. It's important that I get this correct right away. Thanks very much for clarifying.
[11:31am PST] @TaxesbyKatie.com Hey Danny, You can pay yourself as a one lump sum payment or you can spread it out over 8 weeks. It just states that the covered period can't be less than 8 weeks or longer than 24 weeks. Your payments over 11 weeks should be just fine.
@@KatieStOresCFPChFCEA Thank you very much! And finally, my choice of how long the covered period is will be noted in my forgiveness application, correct?
@@KatieStOresCFPChFCEA Sorry, one more thing. How quickly do I have to notify Unemployment? I received the PPP in full yesterday and moved it to a separate account from which I will pay myself weekly equal amounts over eleven weeks. Must I notify UI today, or when I transfer over my "first weekly payment" from the PPP loan? Thank you again.
@@kapilian [2:23pm PST] @TaxesbyKatie.com Hey Danny, Yes, it's your choice on the length of the covered period. Not less than 8 weeks and not more than 24. Anything in-between is okay.
Hello, would like to know can i write my self a check for the entire ppp loan now and it will be forgiven or do i have to write my self a check weekly for 8 weeks for the loan to be 100% forgiven?
[10:26 AM PST @TaxesbyKatie.com Hey Kausion, If you are eligible to use the entire loan amount as an owner compensation replacement then you can just write yourself one check or split it between multiple payments.
@@KatieStOresCFPChFCEA thank you Katie, how do if I know if I'm eligible? I'm self employed, no employees, would I be eligible to pay all at once and it be forgivable?
@@DJKAUSION [4:46 PM PST] @TaxesbyKatie.com Hello Kausion, If you self employed without employees, but you had reportable gross income on Schedule C in 2019 or 2020, you should be eligible to apply. You should be able to use the whole loan amount (up to $20,833) as your income replacement with full forgiveness.
@@angelkirk358 [2:43pm PST] @TaxesbyKatie.com Hello Burt, Yes, just fill out the form. No calculations needed, No paperwork needed to send with. The SBA asks that you save certain paperwork(I think on page 4 of the instructions) in case they ask for it in the future.
Thank you for your speedy response! You are very helpful! This is for round 1 and round 2 of the $20,833 payment correct? We just need to repeat the same steps for both?
So if I have understood this correctly, sole proprietor can claim entire loan amount as owner compensation right? We would have no payroll cost nor non-payroll cost to document. Am I right? @Katie
[10:28 AM PST] @TaxesbyKatie.com Hey Shehzeb, If you are an sole proprietor (no employees), you do not need an official payroll system to be eligible for forgiveness. For PPP forgiveness, “owner compensation replacement” counts as an eligible payroll cost because - in effect - you are paying yourself by replacing the net profits. Just remember, it is capped at $20,833. You do not need to show documentation of how you spent these funds, just that you had this net profit in 2019 (e.g., with a 2019 Form 1040 Schedule C). If your loan proceeds exceed the above amounts for “owner compensation replacement”, you will need to show documentation that the excess was spent on eligible non-payroll costs in order for it to be eligible for forgiveness. Such non-payroll costs must be deductible on your Form 1040 Schedule C.
[10:23am PST] @TaxesbyKatie.com Hello JAH, That's a very important question. Most banks will not do a hard credit check, but some do. It would be a very good idea to contact whoever is handling you loan and ask if it will have a negative effect on your mortgage or not. It should not, but each lender is different and you don't want to mess up getting your house.
I’m curious about the supplies. It states that the supplies need to be placed before the Loan amount is given. So, do I need to purchase supplies before the loan is granted?
@@KatieStOresCFPChFCEA Covered supplier cost means “an expenditure made by an entity to a supplier of goods for the supply of goods that: Are essential to the operations of the entity at the time at which the expenditure is made; and is made pursuant to a contract, order, or purchase order- ‘‘(i) in effect at any time before the covered period with respect to the applicable covered loan; or ‘(ii) with respect to perishable goods, in effect before or at any time during the covered period” But when signing the docs its states “ any covered supplier”.
One more question. If someone gets 2 draws of 20,833 each. Can that person compensate there self on the first draw the full 20,833 and on the second draw compensate there self again the other 20,833 or it can only be done on one draw?
Hello ! I was looking for some help on my ppp loan how to spend as an Uber driver , only your video makes a little sense to me , but l have more questions, do you please accept private correspondence like email or other way l can l ask you my questions ? thank you some much .
[11:06 AM PST] @TaxesbyKatie.com Hey Moe, As Uber driver, you can use the entire loan amount (up to $20,833) as the owner compensation replacement. In other words, you can pay yourself.
Hey God1, If your PPP loan forgiveness was denied partially or in full, then you will have to repay any amount of the PPP loan that is not forgiven at a 1% interest over a 5 year term. Loan payments will be deferred for six months, but will start incurring interest immediately. PPP loans have no fees and no prepayment penalties. So it's still a great deal.
Hi Katie, this was great. One question, I received my first loan 2 weeks ago? Can I still draw the second round? I never drew the first in 2020. If I can, how do I do that? Thanks
@@KatieStOresCFPChFCEA thanks for responding. I didn’t know that so I already applied for the 2nd one. It’s being reviewed. What should I do now? Also, I just received an email from the SBA telling me I can apply for an EIDL. What is that and what do I do to see if I qualify?
Hello Kelly, I’ve got an older video that explains the difference. Here’s the link ruclips.net/video/-rA3AlFFc3M/видео.html It will give you a little background.
@@KatieStOresCFPChFCEA thanks Katie, one last question. I’m not sure what to do. I rushed and applied for my 2nd draw before my 8-10 weeks was up bc of some bad info I was given. It’s not been processed yet but now I’m afraid it won’t look like I spent the full amount and I won’t get the loan forgiven because of this or I won’t qualify for the 2nd draw when my 8-10 weeks was really up. What do I do???
@@kellyjones6732 [11:51am PST] @TaxesbyKatie.com You can still receive loan forgiveness if you don't spend all of your first or second draw PPP loan. But you won't qualify for full loan forgiveness.
I see most of the same similar questions but I just wonder exactly about when applying if I got approved for both a 1st draw and 2nd draw of each $20,833 and I am independent contractor, if today was the first draw that I received and the system is now processing and waiting for the 2nd draw another $20,833, what does all that mean for forgivable loans. How do I apply for forgiveness to get both these draws that were applied for at the same time on the same system? Mind you I so far only received the first draw $20,833 today and waiting on the second draw $20,833. Sorry I am just confused because they system had me apply for both but in the comments I read that first is the first draw, get it forgiven then apply for the second draw, but womply has people apply for both draws at once if qualified.
Hey Straight, You aren't applying for both the 1st Draw and the 2nd Draw at the same time. Like everyone one else, 1st Draw, spend the funds, apply for the 2nd Draw. Since the PPP deadline is coming up fast, looks like they are taking the information down and applying for the 2nd Draw as quickly as possible after you receive the funds from the 1st Draw. Womply calls it STACKING. Here is what Womply says "You can’t apply for a first-draw PPP loan AND a second-draw PPP loan at the same time, but if you act quickly, you can get your first draw funding and spend it in a legal fashion." A link to the rest. www.womply.com/blog/you-can-stack-your-first-and-second-draw-ppp-loans-we-show-you-how/
[2:56pm PST] @TaxesbyKatie.com One other thing. The guidance from the SBA is that you spend, or are about to spend, all the funds from the 1st Draw before receiving the 2nd Draw.
I am sole proprietor, and i had the funds deposited into my savings . What can i do to show I’ve paid myself? Have it weekly transferred into my personal? Please help 😕
Thank you so much, and when i start to use these funds . Will i have to then show proof on what i used towards or only that they went into my personal? This is really a lot lol but thank you for responding :)
Hi Katie, very good video. Can you pls tell me if A self-employed, sole proprietor or independent contractor can take unemployment benefits and PPP loan at the same time in New York State. Thanks!
Good afternoon Katie! I have a question about waiting period and I haven't found it answered in comments. I received PPP1 few days ago ($8k) and I want to get PPP2 (same 8k) as well. I'm worried about forgiveness for both loans because of overlapping periods. Do I have to wait for 8-11weeks weeks (because I'm paying myself?) before applying for PPP2? I'm sole proprietor, 1099, and i don't understand if I can pay myself all PPP1 in once as payroll and apply for PPP2 right after. HELP
[2:28 PM PST] @TaxesbyKatie.com Hey Vladimir, Covered periods for first draw and second draw PPP loans cannot overlap. Second draw borrowers must certify on their loan forgiveness applications that they used all first draw amounts on eligible expenses prior to disbursement of the second draw loan.
@@KatieStOresCFPChFCEA Katie, I understand It. But what is the covered period for self employed person? 8 week is covered period for payroll, right? Since I don't have employees (sole proprietor) - I don't have any payroll as well.
@@ВладимирУфимцев-ч8м [9:09 AM PST] @TaxesbyKatie.com Привет Володя, Your owner compensation replacement is your payroll. The covered period now is anywhere between 8 to 24 weeks. By the way, you can be a sole prop and have employees.
@@KatieStOresCFPChFCEA privet Volodya 😂 got impressed Alright, got it. Won't apply for second draw for these 8 weeks. Better to have one draw forgiven than give both draws back 🤷♂️
Hey Ryan, If you have a business that started before Feb 15, 2020,and meet a few other requirements, you CAN apply for the PPP 1st Draw and then the 2nd Draw. Use the information from your schedule C. What's important is that you show that you had a Gross Income on Line 7. You apply and then the lender sends you the funds.
[2:23pm PST] @TaxesbyKatie.com Hey Hope, Generally you may submit a loan forgiveness application any time on or before the maturity of the loan if you has used all of the loan proceeds.
@@KatieStOresCFPChFCEA Thank you for answering . Since I don't have employee and once it is in my account is not considered used as my owner compensation?
[12:21pm PST] @TaxesbyKatie.com @@hopemendoza3576 Hello Hope, Since you don't have employees and the amount is under 20,833, it is considered Owners compensation replacement when it's in your personal account.
Hello, I would like to ask if eligible self-employed individual filer with schedule C received the PPP loans on gross income. Is he/she can seek full amount forgiven even when they had 0, negative or very small net income on line 31 of schedule C? Thanks or your help.
Hello i just got approved for ppp with blue a corn but in the contract you have to file a w-9 can you help me i didnt sign because i dont know why w-9. In te contract because ppp is not taxeable
[10:13am PST] @TaxesbyKatie.com Hello Mehdi, Yes and Yes. Use the video ruclips.net/video/vDTc4NRpe7E/видео.html to help guide you. After you get the 1st Draw, use up the funds. When the funds are gone you can apply for the 2nd Draw and forgiveness. The deadline is the end of May so get moving. Good luck.
Hey Omar, Apply for the 1st Draw first. Use up the funds from the 1st Draw (this video ruclips.net/video/vDTc4NRpe7E/видео.html) , then you should be eligible for the 2nd Draw. You will be eligible for forgiveness.
Hello Glam, If you are applying for the first time, you'll want to apply for the 1st Draw and follow along with this video. You have until the until of next month to apply. ruclips.net/video/vDTc4NRpe7E/видео.html
Hey Danny, You can apply for forgiveness once all loan proceeds for which you are requesting forgiveness have been used. This can be done at any time up to the maturity date of the loan. They should accept the application if this has happened.
Hey what if I am a sole proprietor I’ve been running my side little side business for over a year. My main income was from a full time job i lost 3 months ago but I never registered my business or anything therefore I don’t have the NAICS code how do I go about that? Also I have been receiving unemployment for 2 months do I just stop claiming unemployment or what do I have to do? I don’t want to get both at the same time and screw myself thank you so much!
[3:46 PM PST] @TaxesbyKatie.com Hey Todd, PPP and unemployment are not compatible with each other. While you can apply for both programs, you cannot collect funds from both programs at the same time. Don't forget to apply for a PPP loan, you have to show the income from your sole-proprietor business on your tax return.
Hi I’m currently using Womply and my current status for my 1st ppp loan is in the lender submitting process, I am a independent contractor with a schedule C and plan to use all funds for owner compensation. If I were to receive funds by the end of April and plan on waiting 11 weeks so the full amount of $20,833 can be forgiven means I’ll lose out in 2nd draw correct ? I’ve heard I can wait the minimum 8 weeks but only use up to 74% on payroll? Thank you for your help 🙏🏻
[1:45 PM PST] @TaxesbyKatie.com Hey Power Stroke, First of all, you should plan to use the extra money to bulletproof your PowerStroke. Back to PPP.... Now you can have the option to choose a covered period of any time frame between 8 and 24 weeks. The application deadline as of right now is May 31st. Unless they will extend it again, you don't have enough time to spend the cash since you can't go shorter than 8 weeks. Regarding the 74% - it is wrong, it is 60% across the board.
@@KatieStOresCFPChFCEA 😆😀I’ve done so already DPF and EGR deletes, she’s running like a champ. Thanks for the quick response! So basically I have time to file for forgiveness on the full amount since I won’t be able to apply for the 2nd draw unless there’s another extension. Does it matter if I pay myself in one lump some or should I take my time and write out weekly checks at this point ?
@@Bl4ckCobra88 [3:07pm PST] @TaxesbyKatie.com Everyone tells me to do the delete on my F350, but it runs perfect, so I'm not going to mess with it. To PPP.... Yes, you have time to file for forgiveness... And it doesn't matter how you pay yourself. Do whatever is the most convenient.
Hi, I’m a Uber/Lyft driver who just got approved. I had it transferred to my checking account. Should I open and transfer the funds to a new account and pay myself weekly or can I just use the whole amount and claim it as owners compensation to have it forgiven. Thanks for the info !
[10:39 AM PST] @TaxesbyKatie.com Hey Positive, You do not need to show transfers between your business and personal bank accounts for your payroll costs to be eligible for forgiveness since you are independent contractor.
Hello Holmes, If you are applying for the 1st time, you’ll probably need this video..... PPP Loan Gross Income 1st time Borrowers. PPP loan application Line 7 first SBA PPP loan Form 2483C
[9:42am PST] @TaxesbyKatie.com Hey Bubble, There is no restriction on receiving both benefits, but as a general rule, you should not use your PPP loan to cover your own compensation while at the same time receiving unemployment benefits.
Has anyone's loan amount changed after you were approved and signed your docs But still have NOT been funded yet?? I signed my docs on 3/15/2021, check my Biz2credit account every day for an update. It's still stuck in "More Information Needed". I checked my E-tran number on SBA and it had the right amount I am supposed to get last week. I checked it now and the $ amount has been cut in half!!!! WTF???? I already signed my docs for the amount I am supposed to get, NOT half that amount! So if I get funded for only half my paperwork I signed says double that!!!!!! BIZ2CREDIT SUCKS!!!!!!!!!
[10:30 AM PST] @TaxesbyKatie.com Hey ZM, You can just write yourself a one check or split it between multiple payments (8 weeks for example), or do a wire transfer from your business account to your personal.
[3:55pm PST] @TaxesbyKatie.com Hey B, To eligible to apply for the 2nd PPP round, you need to have a 25% reduction in gross receipts, not for forgiveness.
I am a independent contractor and only approved for 5,000 can I claim it as Payroll for myself, by opening 2 bank account and transferring money every week to the other for 24 weeks? I have 0 employees. Thank you in advance
[1:44 PM PST] @TaxesbyKatie.com Hey Karen, Since you are an independent contractor without employees, you can essentially use the whole loan amount as an owner compensation replacement. You can transfer the money from your business account as a one-time chunk or spread it out over your regular compensation terms.
@@KatieStOresCFPChFCEA how soon can I apply for draw 2 after getting draw 1 as a sole prop no employees. If I don’t wait a certain amount of time do I risk not getting both loans forgiven???
@@jacquelinesolano9990 [10:23am PST] @TaxesbyKatie.com Hello Jacqueline, Here are the requirements. Most important is to use up your funds before applying for the 2nd Draw: If you or your business received an initial PPP loan, you may qualify for a second round of funding, provided you meet the following requirements: Have no more than 300 employees. Have used or will use the full amount of your first PPP loan.
Hello Jacqueline, It means if you are a sole prop without employees, and you received a loan of $20,833 or less, you can use the full amount as an owner compensation replacement.
[10:43am PST] @TaxesbyKatie.com Hello Priscilla, ((100,000/12) x 2.5)The SBA has a limit of $20,833 for Owners Replacement Compensation. The salaries capped at $100,000. So if your salary was $150,000 you could only use $100,000 in your calculations. There are in-depth calculations in this older video. ruclips.net/video/kkhO4p8kbhA/видео.html
@@KatieStOresCFPChFCEA thank you for your reply! My only concern is if the rules pertains to me regarding the 60/40 rule? I don't have employees nor do I pay utilities or a mortgage to operate as a contractor. Will it be automatically forgiven based on owner compensation? Also, as W2 and 1099 worker, will getting a PPP loan cancel my unemployment benefits? Thank you for your help!
@@bossmoney5408 [3:03pm PST] @TaxesbyKatie.com Hey John, For sole proprietors or independent contractors with no employees, the maximum possible PPP loan is $20,833, and the entire amount is automatically eligible for forgiveness as owner compensation share. There is no restriction on receiving both benefits, but as a general rule you should not use your PPP loan to cover your own compensation while at the same time receiving unemployment benefits.
It's called owners compensation and you have to file for the 24 week covered period. You have to open 2 new bank accounts and transfer money every week from one account to the other and pay yourself equally for 24 weeks afterwards you can apply for 100% forgiveness.
[10:56 AM PST] @TaxesbyKatie.com Hey Martin, Christian and Slick are correct.... If you are a sole proprietor without employees, you can essentially claim the whole amount as an owner compensation replacement.
@will arcs if i put 60% payroll or owners compensation, and yes I pay office rent. The other 40% SBA will know is expenses right . But I put down only 60% amount right in forgiveness app.?
Hello and thank you for your explanation. I am confused and really hope that you will be kind enough to answer this question. I'm self employed with no employees. If my loan amount is for example around $8,000 and I use the full amount of PPP, (100 percent) for owners replacement, then if I pay myself over 8 weeks or even 10 weeks I will then end up paying myself a larger amount per week than I make. For example, someone makes $40,000 (gross), the PPP is loan / grant is $8,333.33. That means that they make a gross of $769.23 / week. How can they then pay themselves $1041.66 per week for 8 weeks or even $833 per week for 10 weeks and get full forgiveness? It doesn't make sense to me, what am I missing? I so hope that you answer and thank you in advance.
[12:31pm PST] @TaxesbyKatie.com Hey Steve, For sole proprietors/independent contractors with no employees, the maximum possible PPP loan is $20,833, and the entire amount is automatically eligible for forgiveness as owner compensation share. You can pay yourself as a one lump sum payment or you can spread it out over 8 weeks. It just states that the covered period can't be less than 8 weeks or longer than 24 weeks. You are overthinking this a little bit. The SBA is bending over backwards to make forgiveness easy and available for as many as possible
@@KatieStOresCFPChFCEA Hi Katie, Thank you so much for your answer! If you have time, I have two more questions. 1.) In my State as in many, the PUA program is a complete mess. I've spoken with a higher tier examiner who directly admitted to "inappropriate" activity within the department. Basically, they aren't paying me (and many other people) correctly. For the these questions there is no guidance and absolutely nobody to call. Do you know how PPP would interact with PUA? AND MORE IMPORTANTLY 2.) Strictly for the year 2021; I'm concerned that since PPP once forgiven will not be taxable and the amount payed so far by PUA is nominal, that I and many other people will be told that we must pay back our healthcare APTC subsidies (because earned income didn't meet the ACA threshold). I've reached out to the top levels of the insurance department and received basically a "nonsensical non answer". The only thing that I can think of is the "Doctrine of Cash Equivalence". This is very concerning to me and I'm proactive, not reactive. If you can enlighten me on this issue, I will be very grateful! Thank you again in advance
@@steves2465 [11:21am PST] @TaxesbyKatie.com Steve, These two programs (PUA and PPP) are not compatible with each other. While you can apply for both programs, you cannot collect funds from both programs at the same time. Regarding the APTC, I can only clarify for you 2020, people do not have to repay excess premium subsidies. This is true regardless of whether their total household income exceeded 400% of the poverty level, and it’s true regardless of the reason their income ended up being larger than projected. Not sure yet for the year 2021.
@@KatieStOresCFPChFCEA Hi Katie, You are a true professional. I really do appreciate that you follow up and answer these questions. You are a very nice person and your responses to my questions are sincerely appreciated. I've got one last question. Would you recommend just not certifying for PUA while receiving PPP or reporting the PPP income? I would simply report it as income, but my State makes this very confusing and unclear. I'm tempted to just not certify, but I have a feeling that whatever decision I make it will be the wrong decision. Your thoughts? Also, is there some way that I can show my appreciation or would you prefer that I pay it forward? Thank you very much!
@@steves2465 [1:03pm PST] @TaxesbyKatie.com Hey Steve, Whatever decision, you should make sure that you do it by the book. I would try to contact your state's employment department and clarify it with them. Certifying for PUA is confirming that you are still unemployed and eligible to continue receiving payments. If you are receiving PPP funds, that is replacing your daily business income, which makes you "employed". I've got some great videos coming up and it will be hard for you to watch them from inside a barbed wire institution.
Even the simplest paperwork scares me (I don't know why!). Thank you for holding my hand and walking me through it!!!
[10:23am PST] @TaxesbyKatie.com
Hello Alia, Don't worry, you're not alone. The government likes to make scary, complicated forms.
Thank you...Easier to understand how you explain it than reading the instructions.
Thanks Kai, Glad to hear that!
Thank you I watch many videos on this subject and never explain in such simplicity as you do
[10:53am PST] @TaxesbyKatie.com
Thanks Prosper, Glad it was helpful!
Thank you very much Katie for your precious time God bless you and us . thanks
Thanks Muhammad. I'm sure the SBA will be putting out more forms soon.
If a PPP loan is approved: the first business purchase everyone should consider is one of those giant touchscreen displays. That is spectacular!
[1:57pm PST] @TaxesbyKatie.com
Hello Louise, Are you implying that it wouldn't be spectacular with just the presenter (me) and no monitor???
Great information, great presenter and great use of technology! 👍
@@MissWeezeyUSA [9:12am PST] @TaxesbyKatie.com
Thanks Louise, Love your use of adjectives.
Thanks for all your help!! For Sole Proprietors... once a deposit is made, what are the next steps to ensure everything is well documented? What papers are they looking for if the person is essentially paying themselves? Because, sole proprietors are needing to use this money to pay bills, survive, pay business expenses, etc. I guess that is what is lost in translation on all these videos on RUclips. A guide on spending the PPP and tracking funds to ensure that the forgiveness is successful. What documents are they looking for and receipts? Thanks so much
Exactly Erica I'm her in Dallas too.
[10:21 AM PST] @TaxesbyKatie.com
Hey Erica, The whole point of this form (3508S), is to make forgiveness easy for small business owners. All you need is for 60% to be used to pay yourself. No need to submit documentation (you do have to have it in case they request it). But to answer your questions:
Generally, PPP funds can be used for: payroll, mortgage interest, rent/lease, utilities, work protection expenses, supplier costs. Self-employed individuals can pay themselves with PPP funds by claiming their owner compensation replacement. Their entire PPP loan is potentially forgivable. The best way to track your PPP spending is to deposit the funds into a separate account (your business) account and make transfers to your personal and mark them as owner compensation replacement. I've got other videos on how to track your funds, what the funds can be spent on, etc... But that's not the purpose of 3508S...... To your larger point, I do see a huge need for a few videos on general business advice for new small businesses. I'll try and get those out after tax season. Thanks for the input.
@@KatieStOresCFPChFCEA Nicely explained
@@KatieStOresCFPChFCEA so should I put 60% as owner compensation should be okay to put in forgiveness app? Yes, I pay office rent, utilities. And in the part of total forgiveness amount, put the whole loan funded amount correct?
@@ChristianYepez @TaxesbyKatiec.com
Hey Christian, Yes, you can assign 60% of your funds as owner compensation replacement and allocate the rest, 40% to eligible expenses. The total amount of your loan should be forgiven.
Great content! Thank you for teaching us! Question for you, are W2 contractors eligible for the ppp loan and forgiveness?
[10:46 AM PST] @TaxesbyKatie.com
Hey Jeramy, That's a new question for me. A W-2 contractor is an individual who is issued a Form W-2 by a temporary work agency, but who works as a contractor for a client of the agency. In the work environment, a person can be classified as an employee or a contractor. Since it can go either way, you have to clear that with the SBA directly. Here is their contact number. You can contact the SBA's Answer Desk by e-mail answerdesk@sba.gov or by telephone at 800-827-5722.
Wao! Thank you so much for this info! I was asking myself how am I gonna apply for forgiveness if I'm self employed with no payroll, no employees. Basically this is an AUTOMATIC FORGIVENESS 100% assuming that the SBA is just checking your 1040 and not inquiring what you did with the money.
[12:11pm PST] @TaxesbyKatie.com
I agree Francisco. I think the SBA is looking to make it very easy for small businesses to get all the loan forgiven.
This is that unglamorous, nitty gritty stuff that we all need. Thank you
[12:51pm PST] @TaxesbyKatie.com
Thanks for the nice comment... 'Unglamorous and nitty gritty' will be the title of my next video....
Katie St Ores CFP, ChFC, EA haha I love it! There’s so much fluff out there on RUclips about “fReE monEy apply NOW!” It’s just so refreshing to hear the real details from a smart, wise woman like yourself. And especially the way you walked us through the form. I will be subscribing and checking back when I need your help!
@@samchoate1719 Thanks again Sam... But I'm still going with the title "Unglamorous and Nitty-Gritty"...
Katie St Ores CFP, ChFC, EA hey let’s do it then!
Katie, thanks so much for this, very helpful, it provided great information, same as a video you did last year when the first PPP launched. So, you have stated that we can choose whichever period we want - 8 weeks, 24 weeks or, per latest rules, anything in between. But, does SBA actually CARE which one it is? I paid myself weekly based on the 2.5 calculation, 10 weeks, and then went back on unemployment. Am I better off then putting 10 weeks? If I put 24 weeks could that trigger anything, in addition to the fact that I went back on unemployment/PUA? On the other hand, previous to the new rule, 24 weeks would have been the only option for me anyway, right, so doesn't matter? Thanks again!
[12:31pm PST] @TaxesbyKatie.com
Hey Broddy, It makes no difference for SBA whether you choose 8 weeks, 24 weeks or anything in between as long as you stay in this time frame, and use your PPP loan proceeds as required. Regarding PUA and PPP, they are not compatible with each other. While you can apply for both programs, you cannot collect funds from both programs at the same time.
Thanks Katie for your explaining PPP loan forgiveness very detail step by step. I have a question. I received a loan on 08/11/2020 and haven't applied for a loan yet. Can I still be eligible to apply for the first draw PPP loan? Is it the deadline July 31st 2021 ?
[10:13am PST] @TaxesbyKatie.com
Hello Alan, You already received your first draw on 08/11/20 as you said yourself. So, you would apply for the second draw now. The deadline for submitting applications is May 31, 2021 however, the first week of May, the major lenders ran out of money unless you qualify as a special exclusion group. So, apply at a local community bank or credit union since all the large lenders are out of money but the little guys still have funds left.
Hi Thanks for this video. I am filling out the forgiveness form it says it must match your application, but I have moved. Kabbage has my old address prefilled in. Will it mess up the process if I put my new address? Worried that any changes will cause an issue. Thanks
[12:41pm PST] @SaintOres.com
Hello Marlo, Try to contact Kabbage directly. They should be able to update your address on file. Their phone number for PPP Loans: 855-669-1549.
I love this woman! She is amazing!
[10:33am PST] @TaxesbyKatie.com
Thanks Cupcake, I'll put that phase on my next business card.
Thanks , Katie
Thanks Captain. The SBA and the IRS love to make my job interesting.
Appreciate you taking the time to explain this, you're awesome!!!
[2:39pm PST] @TaxesbyKatie.com
Thanks for the nice comment Dawonne... Especially the awesome part.
@@KatieStOresCFPChFCEA You are and you're well deserving of it! 😎
Well Covered. You are a Genius Katie
Thanks a million!
[11:23am PST] @TaxesbyKatie.com
Thanks a bunch Eveready. I'll but the Genius part on my business card.
Hi Katie, Thanks for great video and instructions. My questions are in 2 part. Thanks in advance!!!
1) Do you know if we can send the Form 3508S directly to SBA? I have a heck of time dealing with Bank Of America as they have no incentive to do the forgiveness which they will no longer getting that 1%.
2) Is there a service company that takes the Form and process for you?
[10:13am PST] @TaxesbyKatie.com
Hello John, Here is the SBA guidance.... Complete this SBA Form 3508S in accordance with the instructions below, and submit it to your Lender (or the Lender that is servicing your loan).
2) I'm sure there are service companies out there but I don't know any. I've heard that people have had better customer service thru smaller lending institutions. But that's too late for you now. Good luck.
Hi Katie, I am a gig worker with no other employee. I received my fund from the first drawer of $6,400 on 6/24/21. How much do I pay myself weekly? If I choose the 8 weeks to cover period. When is the first payment I pay myself? When is my last payment? Do I just use $6400/8=$800 weekly to pay myself for 8 weeks? Thank you.
[11:41am PST] @SaintOres.com
Hey TG, Since you are a sole proprietor without employees, it will be best to choose 11 weeks covered period, IF you are using the whole amount towards owner compensation replacement. Your covered period starts on the day you received your PPP loan amount and you can start paying yourself right away.
@@KatieStOresCFPChFCEA I heard from all over the place, the cover period I'd 8 week or 24 weeks or 8 weeks to 24 weeks, which one is it, very confused.
How do I contact the lender? Where is that info? I got this from womply
Hey Crystal, Womply is an intermediary, not your lender. You're lender should be on your correspondence of the loan. Depending on who your lender is, they will probably have an online version of this form.
Thank you Katie so much❤
[9:52am PST] @SaintOres.com
Thanks for the heart Amy. And you're welcome.
Thank you very much beautiful for your advice and the good work! I received the email this morning and I sent the request right away . I have a question please , I got the second PPP loan last week am I eligible to get the EIDL Loan increase too ?
Be safe out there
[9:32am PST] @TaxesbyKatie.com
Hey Lakbir, The SBA said at the end of March that the borrowers who previously received funds should not submit a request for an increase; instead, SBA may contact these borrowers regarding their eligibility for an increased loan amount. You may have to clear that with the SBA directly. Here is their contact number. You can contact the SBA's Answer Desk by e-mail answerdesk@sba.gov or by telephone at 800-827-5722.
Hello! I am a sole proprietor with no employees. Filed and received $20,833 on April 14th. My covered period for 8 weeks is 4/14-6/8/21. I have already transferred the funds from my business to personal account in one lump sum for 100% used on owners compensation on 4/16. Does this mean that I can now apply for forgiveness?
Katie your Fabulous! I totally understood Katie's Video but then I read the comments (open 2 new bank accounts and 60% can be my payroll) I just got my 1st PPP loan (funded today) I'm a Independent contract (Licensed with a EIN number) No employees I received $5700.00 today my funds will be gone by 6/14/2021 or before so I would apply for PPP1 loan forgiveness by 6/14/2021 (fill out the form etc) as soon as the funds are gone? then I can apply for the 2nd PPP loan? The comments about the opening 2 new bank accounts if you choose the 24 week option would not pertain to me right? Then I can apply for the 2 PPP loan as soon as my 1st PPP funds are gone? Thank you in Advance :)
[4:53pm PST] @TaxesbyKatie.com
Hello Susan, The SBA guidance says that you can apply for the 2nd Draw when your funds are gone, or are about to be gone. (There are a couple of other requirements, but that is the main one). So if your funds are about used up, you can apply. Use the 8 weeks if it works out better for you. Sounds like it would if you have no employees.
Your video was a huge help to a lot of people :) Thank you Katie!
@@susanrimes3830 Thanks Susan, I'm glad it was helpful.
Hi Katie! My lender is asking me to use my 2020 return for 2nd draw & I'm a bit confused, PLS HELP!!!! .... So, I've received my first draw and used my 2019 return(schedule C Line 7). My question is...When applying for the 2nd draw ppp.. Can I use my 2019 Return(Schedule C line 7) Again, for the same loan amount?
[10:43am PST] @TaxesbyKatie.com
Hey Natasha, Under the new rule, you can use your gross profit amount from Line 7 if have no employees. You should be able to use your 2019 or 2020 tax return for the second draw. You would use this video for the 2nd Draw using Schedule C line 7. ruclips.net/video/bBiaLQviN9A/видео.html
Hello Katie thank you so much for this video. My question is as independent contractor after I filled out a paper should I add a document and prouve for everything I used a money for? And also where should I send a form ? To SBA or my lender? Thank you for everything
Hey Hort, You submit your forgiveness application to your lender. Find out if they have an online version to make it easiler to submit. For loans up to $150,000, generally, you don't have to submit documentation with the application. However, depending on your lender requirements, they may require documentation to support your request and SBA may ask for additional documentation as part of its review of any PPP loan. Whether or not supporting documentation is required to be submitted, you should keep all records relating to your PPP loan, including a copy of IRS 1040 Schedule C for the year that was used to calculate your loan amount, receipts, canceled checks, or account statements verifying that money was spent on eligible expenses.
I am an attorney who has worked alone out of a home office for 20 yrs. I am confused about whether I count as an employee or not. I received a first and second draw PPP loan. On the first one the lender gave me a loan amount based on my gross income figure on Sched. C, even though I think they should have used the net income figure. On the first loan forgiveness App., do I just use the net income amount divided by 12 times 2.5 and pay back the rest? And on the second one the Gross income amount from Sched. C divided by 12 times 2.5? That should equal the entire amount of the second loan. Should I use the same form for both loans? Which one? Sorry for the length.
[9:42am PST] @TaxesbyKatie.com
Hey Paul, You can use Form 3508S to apply for forgiveness for both draws. However, you should fill out two separate forms, one for each draw. On the second item, you should contact your lender and clarify that net/gross calculation issue.
Thank you for the video. I have a question once I filled out the form where should I send it? could you plz tell me?
[1:07pm PST] @TaxesbyKatie.com
Hello Haseeb, You'll want to get it back to your lender. If your lender is local, drop off the application. If you have an online lender, they may want you to email it or maybe they have an online version of the form to my it easier for you.
I am an independent contractor. I recieved 20,833 on Thursday, April 1, 2021. It says that expenses can include payroll to myself, rent, and utilities. You are only talking about payroll to yourself in this video. I am going to use the loan to pay that but also to pay rent (1500 per month) and utilities (ext. at $140 per month). I will have proof that I spent the entire loan on these three items. How do the rent and utilities factor into the forgiveness?
[12:59 PM PST] @TaxesbyKatie.com
Hey John, You can use the loan to pay your rent, utilities, operations expenditures-any software, cloud computing, supplier costs, any personal protection equipment, or property improvements to remain COVID compliant. Just make sure you spend at least 60% on the payroll and on qualified expenses to get 100% forgiveness.
@@KatieStOresCFPChFCEA Thank you. I appreciate your quick reply.
@@pepperonihead [1:53pm PST] @TaxesbyKatie.com
You're welcome John....
Awesome video...I did the 10 weeks of pay but still have remaining funds. I based my funds on my weekly pay from PPP first draw since the loan was based on the same 2019 schedule C. What do I do with the remaining funds..small loan under 10K so should be fully forgiven? Do I pay myself past the 10 weeks? I am in independent contractor. Thanks
[10:23am PST] @TaxesbyKatie.com
Hey Coach, For sole proprietors with no employees, the maximum possible PPP loan is $20,833, and the entire amount is automatically eligible for forgiveness as owner compensation replacement. You can pay yourself as a one lump sum payment or you can spread it out over 8 to 24 weeks. It just states that the covered period can't be less than 8 weeks or longer than 24 weeks.
@@KatieStOresCFPChFCEA Perfect thank you! I will keep paying myself as I am 10 weeks in and loan is only 5600. So I am good. Thanks again!
HI Lena, thank you for shedding light on this topic . Am self employed and I do hair braiding with no employees but have not yet registered my business with the city. Pls can you tell me if my ppp loan can be forgiven if I apply . thanks. pls reply
[9:42am PST] @SaintOres.com
Sorry, no Lena here at my office.
Great information, easy to follow. My loan came directly from SBA not from a bank. Can I still file for a loan forgiveness? If so, where do I mail the application.
[9:52am PST] @SaintOres.com
Hey Aly, Then you will have to submit the forgiveness application to the SBA. Contact the SBA and ask them what is the best way to submit the application. Here is their contact number. You can contact the SBA's Answer Desk by e-mail answerdesk@sba.gov or by telephone at 800-827-5722.
@@KatieStOresCFPChFCEA thank you for answering so quickly. I think my loan was an EIDL so unfortunately it's not forgivable. oh well
@@alyandjensisters [1:43pm PST] @SaintOres.com
Hey Aly, Even if the EIDL will not be forgiven, it's still a good deal.
Hi Katie.
I just received my first draw deposited 5/14/2021 as a sole proprietor with no employees. How soon would you suggest I apply for forgiveness? I paid myself 100% of funds for payroll with check deposited into separate account.
[9:32am PST] @TaxesbyKatie.com
Hey Marques, You can apply for forgiveness any time up to the maturity date of the loan. If you do not apply for forgiveness within 10 months after the last day of the covered period, then PPP loan payments are no longer deferred. So it is a good idea to apply as soon as your covered period ends and you used up all of your funds.
@@KatieStOresCFPChFCEA Thank you!
@@chrismac870 [9:49am PST] @TaxesbyKatie.com
You're welcome....
Thank you Katie. Very much appreciated.👍
[11:31am PST] @TaxesbyKatie.com
Thanks Darien, Glad it was helpful!
Thank you so much. Very clear explanation
Thanks Ethan, Glad it was helpful!
As an independent contractor with no employees, why would I put 1 employee? This doesn't make sense if I used the loan for owner compensation. Am I wrong?
[1:02pm PST] @SaintOres.com
Hey White, I wish I could answer that for you. That's a question for the bureaucrats who wrote the policy for the program. You can contact the SBA forgiveness line at 877-552-2692 and clarify that question with them.
@@KatieStOresCFPChFCEA Ok Thanks.
Thank you for your time. Very helpful. I don't have any employee and got 19,280 that was calculated from line 7 schedule C. Is the whole amount considered my payment and already spent since it is in my account?
[12:36pm PST] @TaxesbyKatie.com
Hello Hope, I also posted this in your other comment. Since you don't have employees and the amount is under 20,833, it is considered Owners compensation replacement when it's in your personal account.
I am a sole proprietor with no employees.. I am going through Womply fast lane so I have received my first ppp loan and will hopefully sign docusign for second ppp loan soon. So, the ppp loans will be only about 2-4 weeks apart. How do we file for forgiveness when the funding date is so close together for the loans? I know we put the date the funds are deposited for ppp 1 and then wait 24 weeks to apply for forgiveness. For ppp2, that timeline will overlap if we get second funds deposited just weeks after the first loan. How do we deal with this when applying for forgiveness?
No, I still am not sure how to get forgiveness for both loans with the timelines the way they will be.
Following
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Hi Katie, if someone applies for their first draw of PPP in 2021 using 2020 tax returns and is approved (in this example 2020 income is higher), will they be able to file for forgiveness using that same tax return? The time stamp I added suggests that it's based on whichever income is lower - which in this example, would mean that the loan would not be forgiven? I hope this makes sense. Thanks in advance! @10:09
[10:12 AM PST] @TaxesbyKatie.com
Hey Ryan, You are using the same base documentation for the forgiveness application that you used to apply for the loan. If you used the 2020 tax return for the loan, numbers used from that specific year are used to calculate the loan amount. You are using the same year's return for forgiveness.
@@KatieStOresCFPChFCEA thank you so much for the fast and detailed response!
@@ryanmoyer1 You're welcome Ryan....
Can you use both ppp loans for owners compensation and both will be forgiven?
[10:13am PST] @TaxesbyKatie.com
Hey Crystal, Yes you can. and it will be fully forgiven if all requirements are met.
@@KatieStOresCFPChFCEA I am a bit worried because I got my first ppp loan April 16 and I checked my bank account and had the 2nd PPP deposited on May 5th. So not sure if it will be forgiven.
@@crystalsierra1153 [10:33am PST] @TaxesbyKatie.com
I don't think you have to worry. It seems to me that the SBA wants to make the PPP loans and forgiveness as easy as possible to the most amount of people.
Hi Katie! I received the first PPP loan but I have not worked since 2019. I have no income for 2020. Can I apply for the second PPP? If so what income would I use? Thank you for your videos. The information that you give is very informative.
[1:33pm PST] @TaxesbyKatie.com
Hello Vicky, You can apply for the 2nd Draw with the same 2019 Schedule C.
@@KatieStOresCFPChFCEA Hello again Katie! Thank you for your response. But just a few more questions. I just got my first PPP at the end of March. Can I apply for the second now? Or is there a time line for applying?
Thanks for the video. I'm a sole proprietor and was awarded a PPP loan for 20k on March 2021.
I'm a US citizen (currently in another country on a business assignment since 2018).
I was planning to return to the US in June where I would have utilized the PPP loan proceeds.
But now, the country I'm currently at is experiencing a new Covid outbreak and there will be long
delays in getting vaccines for foreigners.
Will this cause issues with the SBA concerning the US being my "principal place of residence?"
I'd planned to spend the PPP funds when I returned to the US. I want to make sure that a "force majure"
situation like this does not lead to scrutiny. Thank you for your help.
[1:43pm PST] @TaxesbyKatie.com
Hey Dom, Considering the uniqueness of your situation you should try reaching out to the SBA directly. Here is their contact number. You can contact the SBA's Answer Desk by e-mail answerdesk@sba.gov or by telephone at 800-827-5722.
Since I filed a schedule C for independent contractor and since I qualify for 100% loan forgiveness do I still need to show myself paying myself?? I don't have employees which means I can keep the whole amount im rather confused as to how and if I need to show that im paying myself. My funds were deposited in to my regular checking account. I have no business account because the owner pays me thru checks. Need help understanding if I still need to pay myself the full amount in lump sum?? Since I automatically qualify?
[9:42am PST] @SaintOres.com
Hey William, Yes, in your situation you can pay yourself the whole PPP loan amount as an owner compensation replacement (lump sum or weekly). This is to compensate you for a loss of business income. To take the full amount of owner compensation share, you will have to use a covered period of at least 11 weeks. Many sole proprietors don't have a separate business account, that is OK. But if you have another personal checking account, you can transfer that money just to keep it separate.
@@KatieStOresCFPChFCEA thank you. Brings a peace of mind to this confusion. Im not trying to do this wrong.
@@ceejcollections716 [3:33pm PST] @SaintOres.com
You're welcome.....
Amazing breakdown easy to follow thank you 🙂
[1:23pm PST] @TaxesbyKatie.com
Thanks Tinika, Glad it was helpful!
I'm uber driver, since the irs doesn't consider me a w2 worker, I can't use the loan funds to pay myself correct?
Can I just assume the money is mine and spend on whatever I want? And have it forgiven based on the calculation of line 7 of my schedule c?
[1:43pm PST] @TaxesbyKatie.com
Hey ED, Since you are an independent contractor without employees, you can essentially use the whole loan amount as an owner compensation replacement. And it is eligible to be forgiven.
What documents should I need? My portal I’m doing my application on is asking for tax for 941 for paying taxes for paying myself that doesn’t seem right .. I took it for owners compensation
[1:23pm PST] @SaintOres.com
Hey UV, Contact your lender and explain your situation. This is a very common problem.
@@KatieStOresCFPChFCEA thank you
Hi Katie, this video was so helpful! I do have a question - I received funds using my net income- some CPAs are saying under the old rules (using net income), it is neccessary to wait 24 weeks before filing for forgiveness, even if you spend it all in 2 and a half months -which some folks are recommending in order to receive the full amount. Can I still file for forgiveness at two and half months (and receive 100% forgiveness)? Or do I need to wait the 24 weeks before I file?
[5:19 PM] @TaxesbyKatie.com
Hey J.... If you spent all funding on forgivable expenses and have the correct documentation to submit to your lender, you can apply for loan forgiveness at any time-even before your “covered period” expires. However, your covered period can't be less than 8 weeks. You can pick 8 weeks, 24 weeks or any date in between.
If following for owner compensation can you pay your self for 11 weeks and be forgiven for 11 week time frame or does it have to be 8 or 24 weeks only?
@@ambermays6473 [9:42am PST] @TaxesbyKatie.com
Hey Amber, You may select any covered period between 8 weeks and 24 weeks, which starts upon disbursement of the PPP loan proceeds.
When Should you apply ppp forgivness I am uber driver and documentation do I need?
[10:05 AM PST] @TaxesbyKatie.com
Hello Higaad, There is no fixed deadline to apply for PPP loan forgiveness. PPP loans have a covered period of 8 to 24 weeks after the funds hit your bank account. Once that covered period ends, your loan payments are deferred for 10 months. At the end of the 10 month deferral period, you have to start making monthly payments with loan terms of 1% interest on a 2 to 5 year term. Therefore, it’s best to apply for forgiveness before this payment deferral period ends.
The supporting documents in your cases may include:
Copies of canceled checks
Bank statements with ACH information
@@KatieStOresCFPChFCEA quick follow up can the business owner with just 1099 workers apply for themselves? Also how can you show a 25% loss in gross receipts? Can PUA show that?
@@THEHIGAADINSTITUTE [3:41 PM PST] @TaxesbyKatie.com
Hey HIGAAD, Contractors should not be included in payroll calculations for PPP loans. They are considered their own businesses under the PPP. PUA is not included in your gross income calculation.
@@KatieStOresCFPChFCEA final question: how does a contractor show loss of 25%? For example, many of my cleints have taken 2-3 months off from March-May 2020. Since there is no paystubs would they show their bank statements for PPP 2 forgivness?
Your answers are very much appreciated!
Nice S
Where do you submit your application for forgiveness?
[5:53pm PST] @TaxesbyKatie.com
Hello Karen, You'll want to get the forgiveness application back to your lender. Sometimes they have their own online version of the official form that was in the video. It depends on the lender.
@@KatieStOresCFPChFCEA I don’t have a lender I filled the application myself now I’m little bit confused about sending the application back
@Yeye Jean [10:33am PST] @SaintOres.com
Hey Yeye, If you don't know your lender (you must have a lender to get the PPP), call the SBA. They will able to tell you who issued your loan and then send the application directly to that lender. Try to contact the SBA's Answer Desk by e-mail answerdesk@sba.gov or by telephone at 800-827-5722.
Thank you, I wasn’t sure if we had to submit one or two forms. But it seems as tho after the second draw we then submit two forms, correct?
[11:13 AM PST] @TaxesbyKatie.com
Hey Bra Si, Each PPP loan must use a separate loan forgiveness application form.
You are the best
[9:52am PST] @TaxesbyKatie.com
Thanks Nabilo, That's very nice of you.
Hello, I received my first draw and I’m looking into forgiveness as a sole proprietor. I seen you said I can apply for forgiveness 8-24 weeks. Does that mean I have to wait at least 8 weeks to apply for forgiveness? Also I seen one payment to myself for lost wages would be enough because I’m only going for the first draw
[4:23pm PST] @SaintOres.com
Hey Jay, The SBA tells you to choose a minimum of 8 weeks, a maximum of 24 weeks, or anything in between. It is best to wait until your covered period is over to apply for forgiveness. As long as you stay in this time frame, and use your PPP loan proceeds as required, you should be fine. If you are a sole proprietor without employees, you can pay yourself weekly or make a one lump sum payment, which usually depends on the amount.
@@KatieStOresCFPChFCEA My first draw was $20,800 & so basically you’re saying it’s best I wait 8 weeks or so to apply for forgiveness? I was just going to pay myself in one lump sum also , I’m just trying to make sure i understand how long i have to wait to apply for forgiveness.
[4:53pm PST] @SaintOres.com
Hey Jay, You can pay yourself in a one lump sum payment or you can spread it out over 11 weeks for example. It just states that the covered period can't be less than 8 weeks or longer than 24 weeks. There is no deadline to apply for PPP loan forgiveness. Once that covered period ends, your loan payments are deferred for 10 months. At the end of the 10 month deferral period, you have to start making monthly payments with loan terms of 1% interest on a 5 year term. Therefore, it’s best to apply for forgiveness before this payment deferral period ends. No one will reach out to you, you have to apply and start the forgiveness process yourself.
So if i filed for ppp under my social and it was deposited into my personal checking account. How do i go about forgiveness if i basically can’t pay myself?
Also wondering this
Hello Jahmill, Not too much more you have to do as far as paying yourself. The money deposited was what the PPP calls Owners Compensation Replacement. As long as the amount was less than $20,833.
@@KatieStOresCFPChFCEA So when the funding is deposited into my personal checking, I don’t need to write a check or transfer it else where? I am receiving 20,832 ($1 less than 20,833) Just making sure I don’t need a paper trail or proof that I used at least 60% into payroll or eligible expenses
In other words once it is deposited I just need to apply for the forgiveness for the full amount (20,832) under “Owner Compensation”
Thank you so much in advance and for the uploads!
@@vlm3030 [12:55pm PST] @TaxesbyKatie.com
Hello Victor, I like the $20,832. Yes, you are correct. No need to transfer it anywhere else. When you applied for the loan, you affirmed the fact that the loan was used for the appropriate purpose. So the SBA doesn't require any paperwork for forgiveness, unless they request something in the future. The SBA is bending over backwards to make the whole process as painless as possible for small businesses.
So my loan 20, 833 do it apply for workers compensation
Hi Katie and thanks for your videos. As a sole proprietor / independent contractor, I have no employees. I applied last month for PPP2 (my first time applying for PPP). I was approved and received a max loan. My question is about Owner Compensation Replacement, applying for full loan forgiveness, and the number of weeks I am allowed or required to make the payments to myself out of the loan total.
It is not clear to me if by using the loan for Owner Compensation Replacement I must show that I am using the loan to compensate myself weekly over 8 weeks or over 24 weeks - or over a period of my choosing that between 8 and 24 weeks. Payments to myself over 11 weeks will obviously provide a greater cash flow sooner than weekly "payments" spread over 24 weeks.
It's important that I get this correct right away. Thanks very much for clarifying.
[11:31am PST] @TaxesbyKatie.com
Hey Danny, You can pay yourself as a one lump sum payment or you can spread it out over 8 weeks. It just states that the covered period can't be less than 8 weeks or longer than 24 weeks. Your payments over 11 weeks should be just fine.
@@KatieStOresCFPChFCEA Thank you very much! And finally, my choice of how long the covered period is will be noted in my forgiveness application, correct?
@@KatieStOresCFPChFCEA Sorry, one more thing. How quickly do I have to notify Unemployment? I received the PPP in full yesterday and moved it to a separate account from which I will pay myself weekly equal amounts over eleven weeks. Must I notify UI today, or when I transfer over my "first weekly payment" from the PPP loan? Thank you again.
@@kapilian [2:23pm PST] @TaxesbyKatie.com
Hey Danny, Yes, it's your choice on the length of the covered period. Not less than 8 weeks and not more than 24. Anything in-between is okay.
What about amount spent on payroll costs? I don’t have payroll or employees?
Hey Crystal, Since you don't have employees, up to $20,833, that will be your owner's compensation replacement.
Thank you Katie, you have helped me so much. I will be forever indebted to you.
Thanks for the nice comment Mike... Glad it helped.
Hello, would like to know can i write my self a check for the entire ppp loan now and it will be forgiven or do i have to write my self a check weekly for 8 weeks for the loan to be 100% forgiven?
[10:26 AM PST @TaxesbyKatie.com
Hey Kausion, If you are eligible to use the entire loan amount as an owner compensation replacement then you can just write yourself one check or split it between multiple payments.
@@KatieStOresCFPChFCEA thank you Katie, how do if I know if I'm eligible? I'm self employed, no employees, would I be eligible to pay all at once and it be forgivable?
@@DJKAUSION [4:46 PM PST] @TaxesbyKatie.com
Hello Kausion, If you self employed without employees, but you had reportable gross income on Schedule C in 2019 or 2020, you should be eligible to apply. You should be able to use the whole loan amount (up to $20,833) as your income replacement with full forgiveness.
@@angelkirk358 [2:43pm PST] @TaxesbyKatie.com
Hello Burt, Yes, just fill out the form. No calculations needed, No paperwork needed to send with. The SBA asks that you save certain paperwork(I think on page 4 of the instructions) in case they ask for it in the future.
Thank you for your speedy response! You are very helpful! This is for round 1 and round 2 of the $20,833 payment correct? We just need to repeat the same
steps for both?
Greetings and thanks for this post. Is it possible to get the PPP, etc. even if you haven't filed your 2019, 2020 taxes yet??
[12:11pm PST] @TaxesbyKatie.com
Hello Country, Yes, I think so. But the lender might require your Schedule C.
@@KatieStOresCFPChFCEA Thank you so much for the information and speedy response. Very appreciative.
@@CountryBlessingz You're welcome.....
So if I have understood this correctly, sole proprietor can claim entire loan amount as owner compensation right? We would have no payroll cost nor non-payroll cost to document. Am I right? @Katie
[10:28 AM PST] @TaxesbyKatie.com
Hey Shehzeb, If you are an sole proprietor (no employees), you do not need an official payroll system to be eligible for forgiveness. For PPP forgiveness, “owner compensation replacement” counts as an eligible payroll cost because - in effect - you are paying yourself by replacing the net profits. Just remember, it is capped at $20,833. You do not need to show documentation of how you spent these funds, just that you had this net profit in 2019 (e.g., with a 2019 Form 1040 Schedule C). If your loan proceeds exceed the above amounts for “owner compensation replacement”, you will need to show documentation that the excess was spent on eligible non-payroll costs in order for it to be eligible for forgiveness. Such non-payroll costs must be deductible on your Form 1040 Schedule C.
@@KatieStOresCFPChFCEA thanks for your response, much appreciated!
@@shehzebimam4991 [3:13pm PST] @TaxesbyKatie.com
You're welcome Shehzeb....
@@KatieStOresCFPChFCEA
So Katie, that cap number (20,833) is that the amount of the first draw?
@@acerithm3084 [4:49 PM PST] @TaxesbyKatie.com
Hey Ace, This cap is for both, first and second.
Will applying for this loan effect your credit? We will be closing on a house in a couple of weeks and don't want to screw it up?
[10:23am PST] @TaxesbyKatie.com
Hello JAH, That's a very important question. Most banks will not do a hard credit check, but some do. It would be a very good idea to contact whoever is handling you loan and ask if it will have a negative effect on your mortgage or not. It should not, but each lender is different and you don't want to mess up getting your house.
I’m curious about the supplies. It states that the supplies need to be placed before the Loan amount is given. So, do I need to purchase supplies before the loan is granted?
[4:33pm PST] @TaxesbyKatie.com
Hey JImmy, Where does it say "that the supplies need to be placed before the Loan amount is given"?
@@KatieStOresCFPChFCEA Covered supplier cost means “an expenditure made by an entity to a supplier of goods for the supply of goods that:
Are essential to the operations of the entity at the time at which the expenditure is made; and
is made pursuant to a contract, order, or purchase order- ‘‘(i) in effect at any time before the covered period with respect to the applicable covered loan; or ‘(ii) with respect to perishable goods, in effect before or at any time during the covered period”
But when signing the docs its states “ any covered supplier”.
One more question. If someone gets 2 draws of 20,833 each. Can that person compensate there self on the first draw the full 20,833 and on the second draw compensate there self again the other 20,833 or it can only be done on one draw?
[1:03pm PST] @TaxesbyKatie.com
Hey Karen, It will be $20,833 in each round.
Thank you for answering all my questions really appreciate it!
@@karenleon974 [9:22am PST] @TaxesbyKatie.com
You're welcome Karen.
Dear Katie you the best
[9:52am PST] @TaxesbyKatie.com
Thanks H, I'll put that as the title to my next video....
Hello ! I was looking for some help on my ppp loan how to spend as an Uber driver , only your video makes a little sense to me , but l have more questions, do you please accept private correspondence like email or other way l can l ask you my questions ? thank you some much .
[11:06 AM PST] @TaxesbyKatie.com
Hey Moe, As Uber driver, you can use the entire loan amount (up to $20,833) as the owner compensation replacement. In other words, you can pay yourself.
If you get denied of the ppp loan forgiveness would you owe back whatever how much the loan you requested?
Hey God1, If your PPP loan forgiveness was denied partially or in full, then you will have to repay any amount of the PPP loan that is not forgiven at a 1% interest over a 5 year term. Loan payments will be deferred for six months, but will start incurring interest immediately. PPP loans have no fees and no prepayment penalties. So it's still a great deal.
Hi Katie, this was great. One question, I received my first loan 2 weeks ago? Can I still draw the second round? I never drew the first in 2020. If I can, how do I do that? Thanks
Hey Kelly, first you have to spend all of the first loan. Then you can apply for the 2nd Draw. Some lenders might make you wait 8 weeks between Draws.
@@KatieStOresCFPChFCEA thanks for responding. I didn’t know that so I already applied for the 2nd one. It’s being reviewed. What should I do now? Also, I just received an email from the SBA telling me I can apply for an EIDL. What is that and what do I do to see if I qualify?
Hello Kelly, I’ve got an older video that explains the difference. Here’s the link
ruclips.net/video/-rA3AlFFc3M/видео.html It will give you a little background.
@@KatieStOresCFPChFCEA thanks Katie, one last question. I’m not sure what to do. I rushed and applied for my 2nd draw before my 8-10 weeks was up bc of some bad info I was given. It’s not been processed yet but now I’m afraid it won’t look like I spent the full amount and I won’t get the loan forgiven because of this or I won’t qualify for the 2nd draw when my 8-10 weeks was really up. What do I do???
@@kellyjones6732 [11:51am PST] @TaxesbyKatie.com
You can still receive loan forgiveness if you don't spend all of your first or second draw PPP loan. But you won't qualify for full loan forgiveness.
I see most of the same similar questions but I just wonder exactly about when applying if I got approved for both a 1st draw and 2nd draw of each $20,833 and I am independent contractor, if today was the first draw that I received and the system is now processing and waiting for the 2nd draw another $20,833, what does all that mean for forgivable loans. How do I apply for forgiveness to get both these draws that were applied for at the same time on the same system? Mind you I so far only received the first draw $20,833 today and waiting on the second draw $20,833. Sorry I am just confused because they system had me apply for both but in the comments I read that first is the first draw, get it forgiven then apply for the second draw, but womply has people apply for both draws at once if qualified.
Hey Straight, You aren't applying for both the 1st Draw and the 2nd Draw at the same time. Like everyone one else, 1st Draw, spend the funds, apply for the 2nd Draw. Since the PPP deadline is coming up fast, looks like they are taking the information down and applying for the 2nd Draw as quickly as possible after you receive the funds from the 1st Draw. Womply calls it STACKING. Here is what Womply says "You can’t apply for a first-draw PPP loan AND a second-draw PPP loan at the same time, but if you act quickly, you can get your first draw funding and spend it in a legal fashion." A link to the rest. www.womply.com/blog/you-can-stack-your-first-and-second-draw-ppp-loans-we-show-you-how/
[2:56pm PST] @TaxesbyKatie.com
One other thing. The guidance from the SBA is that you spend, or are about to spend, all the funds from the 1st Draw before receiving the 2nd Draw.
I am sole proprietor, and i had the funds deposited into my savings . What can i do to show I’ve paid myself? Have it weekly transferred into my personal? Please help 😕
[10:13am PST] @SaintOres.com
Hey April, Transferring the funds to personal on a weekly schedule will work.
Thank you so much, and when i start to use these funds . Will i have to then show proof on what i used towards or only that they went into my personal? This is really a lot lol but thank you for responding :)
[12:11pm PST] @SaintOres.com
@@aprilceleste8595 In your situation, this is proof that you paid yourself....Owner's compensation replacement.
Hi Katie, very good video. Can you pls tell me if A self-employed, sole proprietor or independent contractor can take unemployment benefits and PPP loan at the same time in New York State. Thanks!
[1:34 PM PST] @TaxesbyKatie.com
Hey Ganji, You can get money from the PPP OR unemployment, but not both at the same time.
@@KatieStOresCFPChFCEA thanks Katie
@@ganjibubble685 [10:03am PST] @TaxesbyKatie.com
You're welcome Ganji....
Good afternoon Katie! I have a question about waiting period and I haven't found it answered in comments.
I received PPP1 few days ago ($8k) and I want to get PPP2 (same 8k) as well.
I'm worried about forgiveness for both loans because of overlapping periods.
Do I have to wait for 8-11weeks weeks (because I'm paying myself?) before applying for PPP2?
I'm sole proprietor, 1099, and i don't understand if I can pay myself all PPP1 in once as payroll and apply for PPP2 right after. HELP
[2:28 PM PST] @TaxesbyKatie.com
Hey Vladimir, Covered periods for first draw and second draw PPP loans cannot overlap. Second draw borrowers must certify on their loan forgiveness applications that they used all first draw amounts on eligible expenses prior to disbursement of the second draw loan.
@@KatieStOresCFPChFCEA Katie, I understand It. But what is the covered period for self employed person? 8 week is covered period for payroll, right? Since I don't have employees (sole proprietor) - I don't have any payroll as well.
@@ВладимирУфимцев-ч8м [9:09 AM PST] @TaxesbyKatie.com
Привет Володя, Your owner compensation replacement is your payroll. The covered period now is anywhere between 8 to 24 weeks. By the way, you can be a sole prop and have employees.
@@KatieStOresCFPChFCEA privet Volodya 😂 got impressed
Alright, got it. Won't apply for second draw for these 8 weeks. Better to have one draw forgiven than give both draws back 🤷♂️
@@ВладимирУфимцев-ч8м [10:43am PST] @TaxesbyKatie.com
Именно, лучше синица в руке, чем журавль в небе.
Your AMAZING! Thank you for this information
[4:49 PM PST] @TaxesbyKatie.com
Thanks Joseph, for the AMAZING!!!!! comment. Glad the video was helpful.
Katie which loan am I qualified for I owe credit card debt and collections my credit score is getting ruined what’s the solution to payoff the debt
Hey Ryan, If you have a business that started before Feb 15, 2020,and meet a few other requirements, you CAN apply for the PPP 1st Draw and then the 2nd Draw. Use the information from your schedule C. What's important is that you show that you had a Gross Income on Line 7. You apply and then the lender sends you the funds.
You'll probably want to use the PPP application form in this video.
ruclips.net/video/vDTc4NRpe7E/видео.html
Thank you. Can I submit the form as soon as the money hit my account or I have to wait?
[2:23pm PST] @TaxesbyKatie.com
Hey Hope, Generally you may submit a loan forgiveness application any time on or before the maturity of the loan if you has used all of the loan proceeds.
@@KatieStOresCFPChFCEA Thank you for answering . Since I don't have employee and once it is in my account is not considered used as my owner compensation?
[12:21pm PST] @TaxesbyKatie.com
@@hopemendoza3576 Hello Hope, Since you don't have employees and the amount is under 20,833, it is considered Owners compensation replacement when it's in your personal account.
Hello,
I would like to ask if eligible self-employed individual filer with schedule C received the PPP loans on gross income. Is he/she can seek full amount forgiven even when they had 0, negative or very small net income on line 31 of schedule C? Thanks or your help.
[4:16 PM PST] @TaxesbyKatie.com
Barev Arman, Yes, you will be eligible for full forgiveness even your Sch C net income is zero.
Thank you very much. I did not know that you know some Armenian 👍😉
You're Welcome... I only know a few words, but I know many Armenians... Sometimes I think half the population of the West Coast is Armenian.
I never applied so can I apply for both the first and second PPP loan with this application? Do I need to do two applications?
[10:23am PST] @TaxesbyKatie.com
Hey Priscilla, Yes, you can use the same form, but one for each loan. 1st Draw and 2nd Draw.
Hello i just got approved for ppp with blue a corn but in the contract you have to file a w-9 can you help me i didnt sign because i dont know why w-9. In te contract because ppp is not taxeable
I’m uber driver. can I apply for pp1 and ppp2 in short period ? And is all the money forgiveness?
Yes, use womply fast track
[10:13am PST] @TaxesbyKatie.com
Hello Mehdi, Yes and Yes. Use the video ruclips.net/video/vDTc4NRpe7E/видео.html to help guide you. After you get the 1st Draw, use up the funds. When the funds are gone you can apply for the 2nd Draw and forgiveness. The deadline is the end of May so get moving. Good luck.
@@KatieStOresCFPChFCEA thank u 🙏
@@mehdidhaouadi2472 [12:01pm PST] @TaxesbyKatie.com
You're welcome Mehdi.....
@@KatieStOresCFPChFCEA for ppp1 I have to use line 7 for 2019 schedul C
And for ppp2 I have to use line 7 for 2020 schedul C 🤔?
Hello Katie what if I don’t applyed for ppp first ur second . Is I’m still eligible to applying for this form . As Lyft Uber driver
Hey Omar, Apply for the 1st Draw first. Use up the funds from the 1st Draw (this video ruclips.net/video/vDTc4NRpe7E/видео.html) , then you should be eligible for the 2nd Draw. You will be eligible for forgiveness.
Thanks Katie appreciate ya .
@@omarj7985 [10:03am PST] @TaxesbyKatie.com
You're Welcome Omar....
Hello. What if I didn't apply for the loan in 2020? This would be my first application.
Hello Glam, If you are applying for the first time, you'll want to apply for the 1st Draw and follow along with this video. You have until the until of next month to apply.
ruclips.net/video/vDTc4NRpe7E/видео.html
I have my ppp1 through Cabbage , Do any body know why cabbage don't accept forgiveness application. And what can I do. Thanks
Hey Danny, You can apply for forgiveness once all loan proceeds for which you are requesting forgiveness have been used. This can be done at any time up to the maturity date of the loan. They should accept the application if this has happened.
Very informative, no nonsense!
[9:50am PST] @TaxesbyKatie.com
Hello again Paul, Thanks... and check your other comment for my response to your questions.
I appreciate your time doing these videos. ☺️ thank you
You're welcome Misha.
Hey what if I am a sole proprietor I’ve been running my side little side business for over a year. My main income was from a full time job i lost 3 months ago but I never registered my business or anything therefore I don’t have the NAICS code how do I go about that? Also I have been receiving unemployment for 2 months do I just stop claiming unemployment or what do I have to do? I don’t want to get both at the same time and screw myself thank you so much!
[3:46 PM PST] @TaxesbyKatie.com
Hey Todd, PPP and unemployment are not compatible with each other. While you can apply for both programs, you cannot collect funds from both programs at the same time. Don't forget to apply for a PPP loan, you have to show the income from your sole-proprietor business on your tax return.
@@KatieStOresCFPChFCEA I understand that therefore in order to apply for SBA I have to stop claiming unemployment before I receive that money correct?
[4:23pm PST] @TaxesbyKatie.com
Yes, that is correct..
Hi I’m currently using Womply and my current status for my 1st ppp loan is in the lender submitting process, I am a independent contractor with a schedule C and plan to use all funds for owner compensation.
If I were to receive funds by the end of April and plan on waiting 11 weeks so the full amount of $20,833 can be forgiven means I’ll lose out in 2nd draw correct ? I’ve heard I can wait the minimum 8 weeks but only use up to 74% on payroll? Thank you for your help 🙏🏻
[1:45 PM PST] @TaxesbyKatie.com
Hey Power Stroke, First of all, you should plan to use the extra money to bulletproof your PowerStroke. Back to PPP.... Now you can have the option to choose a covered period of any time frame between 8 and 24 weeks. The application deadline as of right now is May 31st. Unless they will extend it again, you don't have enough time to spend the cash since you can't go shorter than 8 weeks. Regarding the 74% - it is wrong, it is 60% across the board.
@@KatieStOresCFPChFCEA 😆😀I’ve done so already DPF and EGR deletes, she’s running like a champ. Thanks for the quick response! So basically I have time to file for forgiveness on the full amount since I won’t be able to apply for the 2nd draw unless there’s another extension. Does it matter if I pay myself in one lump some or should I take my time and write out weekly checks at this point ?
@@Bl4ckCobra88 [3:07pm PST] @TaxesbyKatie.com
Everyone tells me to do the delete on my F350, but it runs perfect, so I'm not going to mess with it. To PPP.... Yes, you have time to file for forgiveness... And it doesn't matter how you pay yourself. Do whatever is the most convenient.
@@KatieStOresCFPChFCEA it’s a must! Specially now since EPA is cracking down on this.....Perfect thank you for the advise!
@@Bl4ckCobra88 Thanks... and You're welcome...
Hi, I’m a Uber/Lyft driver who just got approved. I had it transferred to my checking account. Should I open and transfer the funds to a new account and pay myself weekly or can I just use the whole amount and claim it as owners compensation to have it forgiven. Thanks for the info !
[10:39 AM PST] @TaxesbyKatie.com
Hey Positive, You do not need to show transfers between your business and personal bank accounts for your payroll costs to be eligible for forgiveness since you are independent contractor.
Hey Positive Flight did you follow a specific video to help you apply for the Loan you just got approved on?
Hello Holmes, If you are applying for the 1st time, you’ll probably need this video..... PPP Loan Gross Income 1st time Borrowers. PPP loan application Line 7 first SBA PPP loan Form 2483C
@@KatieStOresCFPChFCEA thank you Katie you Rock! Filling out this week !
@@holmeslindsay4 Thanks Holmes, Apply for the 1st Draw, spend all the money and then you can apply for the 2nd Draw. The deadline is May 31st.
Hello,question I'm receiving PUA can I apply PPP loan???
[9:42am PST] @TaxesbyKatie.com
Hey Bubble, There is no restriction on receiving both benefits, but as a general rule, you should not use your PPP loan to cover your own compensation while at the same time receiving unemployment benefits.
Has anyone's loan amount changed after you were approved and signed your docs But still have NOT been funded yet?? I signed my docs on 3/15/2021, check my Biz2credit account every day for an update. It's still stuck in "More Information Needed". I checked my E-tran number on SBA and it had the right amount I am supposed to get last week. I checked it now and the $ amount has been cut in half!!!! WTF???? I already signed my docs for the amount I am supposed to get, NOT half that amount! So if I get funded for only half my paperwork I signed says double that!!!!!! BIZ2CREDIT SUCKS!!!!!!!!!
hi i’m soleprioreter received 1st ppp 4k how much should i pay myself is it for 8 or 24 weeks and how to pay do they need proof for forgiveness
[10:30 AM PST] @TaxesbyKatie.com
Hey ZM, You can just write yourself a one check or split it between multiple payments (8 weeks for example), or do a wire transfer from your business account to your personal.
What’s the difference between ppp loan number SBA and the Ppp loan number. I only see the SBA one.
I was about to reply... but I see from your other comment that you found the correct numbers.
Hello, as a sole proprietor, in order to apply for the 2nd ppp I need to have a 25% reduction for it to be forgiven, correct?
[3:55pm PST] @TaxesbyKatie.com
Hey B, To eligible to apply for the 2nd PPP round, you need to have a 25% reduction in gross receipts, not for forgiveness.
I am a independent contractor and only approved for 5,000 can I claim it as Payroll for myself, by opening 2 bank account and transferring money every week to the other for 24 weeks? I have 0 employees. Thank you in advance
[1:44 PM PST] @TaxesbyKatie.com
Hey Karen, Since you are an independent contractor without employees, you can essentially use the whole loan amount as an owner compensation replacement. You can transfer the money from your business account as a one-time chunk or spread it out over your regular compensation terms.
@@KatieStOresCFPChFCEA how soon can I apply for draw 2 after getting draw 1 as a sole prop no employees. If I don’t wait a certain amount of time do I risk not getting both loans forgiven???
@@jacquelinesolano9990 [10:23am PST] @TaxesbyKatie.com
Hello Jacqueline, Here are the requirements. Most important is to use up your funds before applying for the 2nd Draw:
If you or your business received an initial PPP loan, you may qualify for a second round of funding, provided you meet the following requirements: Have no more than 300 employees. Have used or will use the full amount of your first PPP loan.
@@KatieStOresCFPChFCEA what does “use full amount mean” for a sole prop no employees since we essentially just write ourselves a check??????
Hello Jacqueline, It means if you are a sole prop without employees, and you received a loan of $20,833 or less, you can use the full amount as an owner compensation replacement.
How did you come up with the $20,083? Is that a percentage of the $100,000?
[10:43am PST] @TaxesbyKatie.com
Hello Priscilla, ((100,000/12) x 2.5)The SBA has a limit of $20,833 for Owners Replacement Compensation. The salaries capped at $100,000. So if your salary was $150,000 you could only use $100,000 in your calculations. There are in-depth calculations in this older video. ruclips.net/video/kkhO4p8kbhA/видео.html
Did I miss in the video how long we had to wait to apply for PPP Forgiveness?
[3:23pm PST] @TaxesbyKatie.com
You can submit a loan forgiveness application any time before the maturity date of the loan.
@@KatieStOresCFPChFCEA i thought is was less than 10 months of the deposit?
Thank you so much for this video! Definitely a huge help!!
Thanks Shawky, Glad it was HUGELY helpful!
What happened if I'm self employed and by mistake i put 0 employees instead of 1
[9:52am PST] @SaintOres.com
Hey Frank, Call the SBA dedicated forgiveness call center: 877-552-2692. They should be able to help you.
@@KatieStOresCFPChFCEA thanks
You're welcome... I heard they are very helpful.
I appreciate you!
[10:23am PST] @TaxesbyKatie.com
Thanks Karla.
Thanks, about ready for Forgiveness.
Thanks Scott. Hopefully they don't revise this form for awhile.
google.com/localservices/review/taxesbykatie
Thanks Scott... I appreciate the review.
So if you file schedule C your loan is automatically forgiven?
[2:23pm PST] @TaxesbyKatie.com
Hello John, File your Schedule C, follow the rules, and fill out the forgiveness form.... And your set.
@@KatieStOresCFPChFCEA thank you for your reply! My only concern is if the rules pertains to me regarding the 60/40 rule? I don't have employees nor do I pay utilities or a mortgage to operate as a contractor. Will it be automatically forgiven based on owner compensation? Also, as W2 and 1099 worker, will getting a PPP loan cancel my unemployment benefits? Thank you for your help!
@@bossmoney5408 [3:03pm PST] @TaxesbyKatie.com
Hey John, For sole proprietors or independent contractors with no employees, the maximum possible PPP loan is $20,833, and the entire amount is automatically eligible for forgiveness as owner compensation share. There is no restriction on receiving both benefits, but as a general rule you should not use your PPP loan to cover your own compensation while at the same time receiving unemployment benefits.
I only borrowed 2,000 can I claim it all as payroll for myself?
Yes, 100% in payroll amount
It's called owners compensation and you have to file for the 24 week covered period. You have to open 2 new bank accounts and transfer money every week from one account to the other and pay yourself equally for 24 weeks afterwards you can apply for 100% forgiveness.
[10:56 AM PST] @TaxesbyKatie.com
Hey Martin, Christian and Slick are correct.... If you are a sole proprietor without employees, you can essentially claim the whole amount as an owner compensation replacement.
Does it have to be whole 24 week?
@will arcs if i put 60% payroll or owners compensation, and yes I pay office rent. The other 40% SBA will know is expenses right . But I put down only 60% amount right in forgiveness app.?
Hello and thank you for your explanation. I am confused and really hope that you will be kind enough to answer this question. I'm self employed with no employees. If my loan amount is for example around $8,000 and I use the full amount of PPP, (100 percent) for owners replacement, then if I pay myself over 8 weeks or even 10 weeks I will then end up paying myself a larger amount per week than I make. For example, someone makes $40,000 (gross), the PPP is loan / grant is $8,333.33. That means that they make a gross of $769.23 / week. How can they then pay themselves $1041.66 per week for 8 weeks or even $833 per week for 10 weeks and get full forgiveness? It doesn't make sense to me, what am I missing? I so hope that you answer and thank you in advance.
[12:31pm PST] @TaxesbyKatie.com
Hey Steve, For sole proprietors/independent contractors with no employees, the maximum possible PPP loan is $20,833, and the entire amount is automatically eligible for forgiveness as owner compensation share. You can pay yourself as a one lump sum payment or you can spread it out over 8 weeks. It just states that the covered period can't be less than 8 weeks or longer than 24 weeks. You are overthinking this a little bit. The SBA is bending over backwards to make forgiveness easy and available for as many as possible
@@KatieStOresCFPChFCEA Hi Katie, Thank you so much for your answer! If you have time, I have two more questions. 1.) In my State as in many, the PUA program is a complete mess. I've spoken with a higher tier examiner who directly admitted to "inappropriate" activity within the department. Basically, they aren't paying me (and many other people) correctly. For the these questions there is no guidance and absolutely nobody to call. Do you know how PPP would interact with PUA? AND MORE IMPORTANTLY 2.) Strictly for the year 2021; I'm concerned that since PPP once forgiven will not be taxable and the amount payed so far by PUA is nominal, that I and many other people will be told that we must pay back our healthcare APTC subsidies (because earned income didn't meet the ACA threshold). I've reached out to the top levels of the insurance department and received basically a "nonsensical non answer". The only thing that I can think of is the "Doctrine of Cash Equivalence". This is very concerning to me and I'm proactive, not reactive. If you can enlighten me on this issue, I will be very grateful! Thank you again in advance
@@steves2465 [11:21am PST] @TaxesbyKatie.com
Steve, These two programs (PUA and PPP) are not compatible with each other. While you can apply for both programs, you cannot collect funds from both programs at the same time. Regarding the APTC, I can only clarify for you 2020, people do not have to repay excess premium subsidies. This is true regardless of whether their total household income exceeded 400% of the poverty level, and it’s true regardless of the reason their income ended up being larger than projected. Not sure yet for the year 2021.
@@KatieStOresCFPChFCEA Hi Katie, You are a true professional. I really do appreciate that you follow up and answer these questions. You are a very nice person and your responses to my questions are sincerely appreciated. I've got one last question. Would you recommend just not certifying for PUA while receiving PPP or reporting the PPP income? I would simply report it as income, but my State makes this very confusing and unclear. I'm tempted to just not certify, but I have a feeling that whatever decision I make it will be the wrong decision. Your thoughts? Also, is there some way that I can show my appreciation or would you prefer that I pay it forward? Thank you very much!
@@steves2465 [1:03pm PST] @TaxesbyKatie.com
Hey Steve, Whatever decision, you should make sure that you do it by the book. I would try to contact your state's employment department and clarify it with them. Certifying for PUA is confirming that you are still unemployed and eligible to continue receiving payments. If you are receiving PPP funds, that is replacing your daily business income, which makes you "employed". I've got some great videos coming up and it will be hard for you to watch them from inside a barbed wire institution.