Client Alerts Paycheck Protection Program: Rules for Self-Employed Persons Issued

04.15.20 | By: Frank L. Washelesky

On April 14, 2020, the Treasury Department issued its third formal Interim Final Rule related to the Paycheck Protection Program (PPP).

read more

On April 14, 2020, the Treasury Department issued its third formal Interim Final Rule related to the Paycheck Protection Program (PPP).  

Major items that have been clarified in this notice are detailed below:

  • Self-employed individuals who file a Schedule C for their business as part of their individual income tax return will base their compensation on the net profit reported on their 2019 Schedule C, capped at $100,000 per year. A Schedule C borrower with no employees that earns in excess of $100,000 will be eligible for a PPP loan of $20,833 (2.5 x $100,000/12). 
  • The $100,000 per employee cap on compensation for the computation of forgiveness during the eight-week benefit period is specifically calculated at 8/52 of $100,000. An employee earning more than $100,000 per year will be limited to $15,385 of eligible compensation when computing the amount of PPP loan eligible for forgiveness.
  • Home office-related expenses do not qualify for forgiveness. Only qualified business rent, interest on mortgages and utility costs, if any, specific to the business and deducted on the Schedule C or business tax return and paid during the eight-week period are eligible for forgiveness.
  • Partners in a partnership whose income is categorized as self-employment income on their Schedule K-1 may not submit a separate PPP loan application as a self-employed individual. Instead, the self-employment income of active partners may be included as a payroll cost, up to $100,000 annualized limit, on the PPP loan application of the partnership.

Many businesses have already received approval and funding. Unless Congress acts soon, the funds allocated to this program will not last much longer. If you have already submitted PPP loan applications, you must carefully weigh the risks of updating the application versus the additional dollars that these changes may offer.

Related Read: Paycheck Protection Program Rules Clarified 

We will continue to monitor changes and guidance as they become available. If you have questions regarding this Client Alert or if we can be of assistance in helping you through the application process, please contact Frank Washelesky at [email protected] or your ORBA advisor.

News & Events

view all

Forward ThinkingClient Alerts

view all

Firm News


ORBA’s Stephanie Zaleski-Braatz Appointed to Illinois CPA Society’s Board of Directors
CHICAGO — ORBA, one of Chicago ’s largest independent accounting, tax and consulting firms, is pleased to announce that Stephanie Zaleski-Braatz, CPA has been named to the Illinois CPA Society's (ICPAS) Board of Directors. She will serve in this role for a three-year term through March 2027.

view all

seminars & events


ORBA will gladly provide you with hard copies of the useful guides listed below. Select which guides you would like to receive and submit the form below.

  • Tax Pocket Guide
  • Tax Planning Guide
  • Records Retention Schedule
  • Auto, Travel & Business Log

request guide

Forward Thinking
Forward Thinking