PPP for high income 1099 worker with no employees?

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Kennedy
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Joined: Mon Nov 10, 2014 2:47 pm

PPP for high income 1099 worker with no employees?

Post by Kennedy »

If one is a high income (>$300K) 1099 independent contractor without employees who files taxes with a schedule C, is he/she eligible for PPP? In this scenario, the individual does not have a rent/mortgage associated with the business but does use a home office that is taken as a deduction on taxes every year.

If so, I read on this forum that one must have already completed their 2019 taxes in order to apply for the PPP program. Is this correct?

The SBA website states that "All amounts spent on the following items during the first 8 weeks of the loan term are 100% forgivable: (a) to replace your 1099-MISC income or your net self-employment income." If in this scenario, the worker's income has not been adversely impacted by covid (and hence there isn't anything to "replace,") will the loan have to be re-paid?
Last edited by Kennedy on Thu Apr 23, 2020 12:12 pm, edited 1 time in total.
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simplesimon
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Re: PPP for high income 1099 worker with no employees?

Post by simplesimon »

Yes you're eligible if your business has been negatively affected by COVID.

You'll need to provide 2019 Schedule C.

The amount you'll get is Net Profit/12*2.5.

The amount that will be forgiven is Net Profit/52*8.

Read the application as there are a number of things you'll need to certify, like this:
Current economic uncertainty makes this loan request necessary to support the ongoing operations of the Applicant.
dachshunddad
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Re: PPP for high income 1099 worker with no employees?

Post by dachshunddad »

Confirm this, but I believe it is based on 100K max yearly amount.
Topic Author
Kennedy
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Joined: Mon Nov 10, 2014 2:47 pm

Re: PPP for high income 1099 worker with no employees?

Post by Kennedy »

simplesimon wrote: Thu Apr 23, 2020 12:11 pm Yes you're eligible if your business has been negatively affected by COVID.

You'll need to provide 2019 Schedule C.

The amount you'll get is Net Profit/12*2.5.

The amount that will be forgiven is Net Profit/52*8.

Read the application as there are a number of things you'll need to certify, like this:
Current economic uncertainty makes this loan request necessary to support the ongoing operations of the Applicant.
Thank you for the information. I have a family member who was asking me about whether he is eligible for PPP. He did just clarify with me that his income has decreased, but the amount of decrease isn't enough for him to state that the loan is necessary for his ongoing operations, at least at this point.
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simplesimon
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Re: PPP for high income 1099 worker with no employees?

Post by simplesimon »

dachshunddad wrote: Thu Apr 23, 2020 12:14 pm Confirm this, but I believe it is based on 100K max yearly amount.
Yes you're right. Forgot to mention net profit max of $100k.
Topic Author
Kennedy
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Joined: Mon Nov 10, 2014 2:47 pm

Re: PPP for high income 1099 worker with no employees?

Post by Kennedy »

So... further information from my family member who originally posed the question... he said that the business for whom he is an independent contractor is still open- for now.... He is guessing the business will consolidate locations and his services will be cut in half if this happens, but the business hasn't said anything one way or the other.

Based on that, I'm not sure if he meets this criteria: Current economic uncertainty makes this loan request necessary to support the ongoing operations of the Applicant.

Any thoughts?
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