Special Rules for Self-Employed (Schedule C Taxpayers)

by | May 4, 2021 | COVID-19, Paycheck Protection Program

In addition to the permitted use of  Paycheck Protection Program (PPP) funds, a sole proprietor may use PPP funds for owner compensation replacement per the following guidelines below: 

Owner compensation replacement for a sole proprietor is defined as 2019 Schedule C net profit (limited to $100,000). 

Steps to calculate the loan forgiveness amount:  

  1. 2019 Sch C net profit (up to $100,000). 
  2. Multiply amount calculated in step 1 by 8/52 to represent 8 weeks of profit. 
  3. Reduce amount calculated in step 2 by any qualified sick or family leave amount for which a credit was claimed under the Families First Coronavirus Response Act. 

Additional guidance from the SBA will be provided for self-employed individuals who were in business on 2/15/20 but were not in business in 2019. 

Review the CARES Act Overview

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Tené Thomas


Bon vivant. Fashionista. Rock Star mom.