Answer—you most likely—if you file a business tax return and have not yet received any Paycheck Protection Program (PPP) monies.
But don’t wait. The money is going to run out fast and once it’s gone, so is the PPP. And the new PPP ends March 31, even if the money is not gone by then.
You qualify for the PPP if any of the following are true:
You file your taxes on Schedule C of your tax return. Businesses that file on Schedule C include independent contractors (often called 1099 folks), single-member LLCs, proprietorships, and statutory employees such as life insurance salespeople.
You file your taxes on Schedule F (ranchers and farmers).
You are a general partner in a partnership, but the partnership asks for and receives the money based on your and the other partners’ combined self-employment incomes, as adjusted.
You operate as an S corporation.
You operate as a C corporation.
You are the only worker in the business—and if you have employees in the business, you qualify on both your ownership worker status and your employees’ W-2 status.
If you qualify, you want the PPP money. It’s a tax-free infusion. It’s called a loan, but it’s not. You have to repay loans. The PPP does not have to be repaid—it’s forgiven.
Expenses paid with a PPP forgiven loan are tax deductible.
Here’s how the PPP cash infusion works for the various business entities:
Form 1040 Schedule C Business with No Employees
If you file your business taxes on Schedule C of your Form 1040, you calculate your first-draw PPP cash infusion money using the following three-step formula:
Step 1. Go to either your 2019 or 2020 Schedule C and find your net profit on line 31. If the profit is ... Log in to view full article.