Voglio sapere a riguardo di…

Federal Register / Vol. 86, No. 43 / Monday, March 8, 2021 / Rules and Regulations
jbell on DSKJLSW7X2PROD with RULES

C filer that included employee payroll costs in determining the PPP loan amount from taking the full loan amount as owner compensation. This promotes Congresss goal of keeping workers paid and employed. However, the use of gross income by Schedule C
filers may, in some cases, increase the risk of waste, fraud, or abuse, because it will substantially increase the maximum loan amount for relevant applicants, and in some cases an applicants gross income may not accurately reflect the extent to which a PPP loan is necessary to support the ongoing operations of the applicants business. To mitigate this risk, if a Schedule C filer elects to use gross income to calculate its loan amount on a First Draw PPP Loan and the borrower reported more than $150,000 in gross income on the Schedule C that was used to calculate the borrowers loan amount, the borrower will not automatically be deemed to have made the statutorily required certification concerning the necessity of the loan request in good faith, and the borrower may be subject to a review by SBA of its certification.8
The safe harbor that SBA previously provided for borrowers that, together with their affiliates, receive PPP Loans with an original principal amount of less than $2 million, will not apply to Schedule C filers that elect to use gross income to calculate their loan amount on a First Draw PPP Loan if they report more than $150,000 in gross income on the Schedule C that was used to calculate the borrowers loan amount.
SBA is eliminating the loan necessity safe harbor for these borrowers as they may be more likely to have other available sources of liquidity to support their businesss operations than Schedule C filers with lower levels of gross income. SBA will review a sample of the population of First Draw PPP
Loans made to Schedule C filers using the gross income calculation if the gross income on the Schedule C used to calculated the borrowers loan amount exceeds the threshold of $150,000.9 If the borrower exceeds this threshold, then SBA will, for the sample drawn, assess whether these borrowers complied with the PPP eligibility criteria, including the good faith loan necessity certification. This will serve as 8 SBA is not applying this safe harbor exclusion to Second Draw PPP Loans, because those applicants are required to certify that they have realized a reduction in gross receipts in excess of 25% relative to the relevant comparison time period.
9 SBA has developed a new borrower application form, SBA Form 2483C, for First Draw PPP Loan borrowers that elect to use the new gross income calculation. Borrowers will be required to disclose their total amount of gross income on the form.

VerDate Sep<11>2014

16:10 Mar 05, 2021

Jkt 253001

an additional deterrent to fraud, waste, and abuse because higher income borrowers that elect to use gross income rather than net profit to calculate their loan amount will face the prospect of a heightened review, which would include a review of their good faith loan necessity certification. The $150,000
gross income threshold is necessary in light of the potentially large volume of applications SBA will receive from First Draw PPP Loan applicants that are eligible to use the gross income calculation. Maintaining the safe harbor for borrowers under this threshold is also necessary in light of the deterrent effect of auditing risk for many underresourced borrowers whose fixed cost of bookkeeping is higher in proportion to their income. This approach will enable SBA to conserve its finite audit resources and focus its reviews of First Draw PPP Loans using the new calculation on larger loans, where the compliance effort may yield higher returns. The reviews of loans to Schedule C filers that used the gross income calculation will follow the same processes that apply to PPP loans generally, except as specified above.10
Therefore, the following changes are made to PPP rules:
a. Subsection B.4.b of the consolidated interim final rule implementing updates to the PPP 86 FR
3692, 3700 is revised to read as follows:
b. I have income from selfemployment and file an IRS Form 1040, Schedule C. How do I calculate the maximum amount I can borrow, and what documentation is required? 53
How you calculate your maximum loan amount depends upon whether you employ other individuals. If you have no employees, use the following methodology to calculate your maximum loan amount:
i. Step 1: From your 2019 or 2020 IRS
Form 1040, Schedule C, you may elect to use either your line 31 net profit amount or your line 7 gross income amount. If you are using 2020 to calculate payroll costs and have not yet filed a 2020 return, fill it out and compute the value. If this amount is over $100,000, reduce it to $100,000. If both your net profit and gross income are zero or less, you are not eligible for a PPP loan.
ii. Step 2: Calculate the average monthly net profit or gross income 10 See part V. of the consolidated interim final rule on loan forgiveness requirements and loan review procedures.
53 This subsection was originally published at 85
FR 21747, subsection III.1.b. April 20, 2020 and has been modified to conform to additional rules or guidance and the Economic Aid Act.

PO 00000

Frm 00003

Fmt 4700

Sfmt 4700

13151

amount divide the amount from Step 1
by 12.
iii. Step 3: Multiply the average monthly net profit or gross income amount from Step 2 by 2.5. This amount cannot exceed $20,833.
iv. Step 4: Add the outstanding amount of any Economic Injury Disaster Loan EIDL made between January 31, 2020 and April 3, 2020 that you seek to refinance. Do not include the amount of any advance under an EIDL COVID19
loan because it does not have to be repaid.
You must provide the 2019 or 2020
whichever you used to calculate your loan amount IRS Form 1040, Schedule C with your PPP loan application to substantiate the applied-for PPP loan amount and a 2019 or 2020 whichever you used to calculate your loan amount IRS Form 1099MISC detailing nonemployee compensation received box 7, invoice, bank statement, or book of record that establishes you are selfemployed. If using 2020 to calculate your loan amount, this is required regardless of whether you have filed a 2020 tax return with the IRS. You must provide a 2020 invoice, bank statement, or book of record to establish you were in operation on or around February 15, 2020.
If you have employees, use the following methodology to calculate your maximum loan amount:
i. Step 1: Compute 2019 or 2020
payroll using the same year for all items by adding the following:
a. At your election, either 1 the net profit amount from line 31 of your 2019
or 2020 IRS Form 1040, Schedule C, or 2 your 2019 or 2020 gross income minus employee payroll costs, calculated as your gross income reported on IRS Form 1040, Schedule C, line 7, minus your employee payroll costs reported on lines 14, 19, and 26 of IRS Form 1040, Schedule C for either option, if you are using 2020 amounts and have not yet filed a 2020 return, fill it out and compute the value, up to $100,000 on an annualized basis, as prorated for the period during which the payments are made or the obligation to make the payments is incurred if this amount is over $100,000, reduce it to $100,000, or if this amount is less than zero, set this amount at zero;
b. 2019 or 2020 gross wages and tips paid to your employees whose principal place of residence is in the United States, computed using 2019 or 2020
IRS Form 941 Taxable Medicare wages & tips line 5c, Column 1 from each quarter plus any pre-tax employee contributions for health insurance or other fringe benefits excluded from Taxable Medicare wages & tips; subtract
E:FRFM08MRR1.SGM

08MRR1