Article Date:
July 2020


Word Count:
1197

 

 

PPP Loan Forgiveness for Partnerships and S and C Corporations


If you operate your business as a partnership, or an S or C corporation, you face entity-specific Payroll Protection Program (PPP) loan forgiveness rules that apply to you as an owner-worker in the business.

 

The rules that apply to you do not apply to the rank-and-file employee group. The government puts you, the owner-worker, in a separate “owner-employee” category to limit your business’s PPP benefits.

 

There are four types of owner-employees:

 

1.

General partners in partnerships

2.

S corporation shareholder-employees

3.

C corporation shareholder-employees

4.

Form 1040, Schedule C filers (e.g., the self-employed, sole proprietors, 1099 recipients, single-member LLCs, and husband and wife LLCs treated as single-member LLCs)

 

If you own all or part of your business and work in the business, you fall into one of the four categories.

 

We discussed the new loan forgiveness rules for the Schedule C business in Government Clarifies PPP Loan Forgiveness for the Self-Employed.

 

The maximum loan attributable to, and forgiveness available for, the “compensation paid” to any SBA-defined owner-employee across all businesses is1

 

·

$15,385 for borrowers who received a PPP loan before June 5, 2020, and elect to use an eight-week covered period.

·

$20,833 for borrowers under the 24-week covered period. ... Log in to view full article.

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