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Washington Watch - February 25, 2021

In this issue of Washington Watch, read about changes to the PPP Program and the American Rescue Plan

Changes to PPP Program Aimed at Increasing Self-Employed and Micro-Business Eligibility

The Biden Administration also announced changes in how the self-employed can calculate the size of their PPP loan. Until now, a self-employed PPP loan applicant would use “net income” (Line 31 on Form 1040 of the Schedule C), to calculate the loan amount. Using net income as the basis of determining loan size dramatically reduces the value of PPP loans for self-employed because it excluded eligible expenses. Going forward, self-employed individuals will use gross income to calculate the PPP loan amount. Additionally, the Biden Administration has set aside $1 billion for businesses in this category without employees located in low- and moderate-income (LMI) areas. The changes in the application are expected to go into effect on/around March 1. The NASE has advocated for this change to ensure that the self-employed are able to secure a PPP loan during the Covid pandemic.

Additionally, starting on Wednesday, February 24, the SBA will open a priority window for business owners with 20 or fewer employees to secure a PPP loan.

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Courtesy of NASE.org
https://www.nase.org/about-us/nase-publications/washington-watch/February-25-2021