On April 14, the SBA announced that a partnership (including an LLC treated as a partnership for tax purposes) may include partners’ self-employment income as eligible compensation on the partnership’s Paycheck Protection Program (PPP) application. Unfortunately, many partnerships had already applied for and received PPP loans before the SBA issued its guidance.

To enable partnerships to benefit from the full amount of PPP funds for which they’re eligible, the SBA issued a new rule yesterday that allows lenders to increase partnerships’ PPP loan amounts to take into account partners’ self-employment income. The SBA’s guidance also applies to seasonal businesses that previously received PPP funding, but that are now eligible for a larger PPP loan under the SBA’s April 28 rules for seasonal employers.

If you believe that your partnership could be eligible for additional funding under the SBA’s new rule, we strongly recommend that you contact your lender as soon as possible. Lenders will not be able to increase PPP loans after they have filed their final loan documentation with the SBA. Your lender can tell you whether you are eligible to apply for additional funding and how to apply for a PPP increase.

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Our firm provides the information in this article for general guidance only, and does not constitute the provision of legal advice, tax advice, accounting services, investment advice or professional consulting of any kind. The information provided herein should not be used as a substitute for consultation with professional tax, accounting, legal or other competent advisors. Before making any decision or taking any action, you should consult a professional advisor who has been provided with all pertinent facts relevant to your particular situation. Tax articles in this blog are not intended to be used, and cannot be used by any taxpayer, for the purpose of avoiding accuracy-related penalties that may be imposed on the taxpayer. The information is provided “as is,” with no assurance or guarantee of completeness, accuracy or timeliness of the information, and without warranty of any kind, express or implied, including but not limited to warranties of performance, merchantability and fitness for a particular purpose.




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