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First Draw PPP Loan Maximum Loan Amounts & Required Documents

The information below provides guidance for:

  • Calculating the maximum amount of PPP loan funds you can request
  • What documents you will need to provide

Guidance is based on business type and whether or not the business has employees. The guidance is taken from the SBA FAQ How To Calculate Maximum Loan Amounts For First Draw PPP Loans And What Documentation To Provide.

Page Index:


Self Employed, Filing Form 1040, Schedule C

  • How you calculate your maximum loan amount depends upon whether or not you employ other individuals.
  • You may use payroll costs for either calendar year 2019 or calendar year 2020 for your loan amount calculation.
    • You must use the same year for all documentation and IRS forms.

Self Employed, Filing Form 1040, Schedule C Without Employees Maximum Loan Amount Calculation (Updated 3/3/21)

If you are self employed, file form 1040 Schedule C, and have no employees, the following methodology should be used to calculate your maximum loan amount:  

  • 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 this amount is zero or less, you are not eligible for a PPP loan. 
  • Step 2: Calculate the average monthly net profit or gross income amount (divide the amount from Step 1 by 12).
  • Step 3: Multiply the average monthly net profit or gross income amount from Step 2 by 2.5. This amount cannot exceed $20,833.
  • 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 COVID-19 loan (because it does not have to be repaid). 

Self Employed, Filing Form 1040, Schedule C Without Employees Required Documents 

If you are self employed, file form 1040 Schedule C, and have no employees, you must provide:

  • All worksheets/spreadsheets that you used to prepare and support your loan amount calculation.
  • The 2019 or 2020 (whichever you used to calculate loan amount) Form 1040 Schedule C.
    • If using 2020, you must complete and include a draft of 2020 IRS Form 1040 Schedule C even if you have not yet filed taxes.
  • A 2019 or 2020 (whichever you used to calculate loan amount) IRS Form 1099-MISC detailing nonemployee compensation received (box 7), IRS Form 1099-K, invoice, bank statement, or book of record that establishes you are self-employed.
    • If using 2020 to calculate loan amount, this is required regardless of whether you have filed a 2020 tax return with the IRS.
  • You must also provide a 2020 invoice, bank statement, or book of record to establish you were in operation on or around February 15, 2020. 

Self Employed, Filing Form 1040, Schedule C With Employees Maximum Loan Amount Calculation (Updated 3/3/21)

If you are self employed, file form 1040 Schedule C, and have employees, the following methodology should be used to calculate your maximum loan amount: 

  • Step 1: Compute 2019 or 2020 payroll (using the same year for all items) by adding the following:  
    • At your election, either
      • The net profit amount from line 31 of your 2019 or 2020 Form 1040 Schedule C OR
      • 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
      • For either option, use 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. If this amount is less than zero, set this amount at zero.
    • 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 any amounts paid to any individual employee in excess of $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 and any amounts paid to any employee whose principal place of residence is outside the United States.
    • 2019 or 2020 employer contributions to employee group health, life, disability, vision and dental insurance (portion of IRS Form 1040 Schedule C line 14 attributable to those contributions); employer contributions to employee retirement plans (Form 1040 Schedule C line 19), and 2019 or 2020 state and local taxes assessed on employee compensation (primarily state unemployment insurance tax from state quarterly wage reporting forms). 
  • Step 2: Calculate the average monthly amount (divide the amount from Step 1 by 12). 
  • Step 3: Multiply the average monthly amount from Step 2 by 2.5. 
  • Step 4: Add the outstanding amount of any 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 COVID-19 loan (because it does not have to be repaid). 

Self Employed, Filing Form 1040, Schedule C With Employees Required Documents 

If you are self employed, file form 1040 Schedule C, and have employees, you must supply:

  • All worksheets/spreadsheets that you used to prepare and support your loan amount calculation.
  • Your 2019 or 2020 (whichever you used to calculate loan amount) Form 1040 Schedule C.
    • If using 2020, you must complete and include a draft of 2020 IRS Form 1040 Schedule C even if you have not yet filed taxes.
  • Form 941 for all quarters.
    • If your 2020 Q4 Form 941 is not yet filed, you may use a 2020 Q4 payroll report for that quarter instead.
    • Other tax forms containing similar information may also be used as applicable for your business (for example, Form 943 for agricultural employers or Form 944 for very small businesses).
  • State quarterly wage unemployment insurance tax reporting forms from each quarter in 2019 or 2020 (whichever you used to calculate loan amount) or equivalent payroll processor records. (Optional: this is only required if used in your calculation.)
  • Evidence of any retirement and health/life/disability/vision/dental insurance contributions, if applicable. (Optional: this is only required if used in your calculation.)
  • A payroll statement or similar documentation from the pay period that covered February 15, 2020 must be provided to establish you were in operation on February 15, 2020. 

Self Employed, Filing Form 1040, Schedule C & In Operation 2/15/20 But Not In Operation Between 2/15/19 & 6/30/19 Maximum Loan Amount Calculation

If you are self employed, file form 1040 Schedule C, and were in operation on February 15, 2020, but were not in operation between February 15, 2019, and June 30, 2019, you may choose one of two ways to calculate your First Draw PPP Loan amount.

  • (Option 1) The first option is to follow the applicable instructions above, using payroll information for all of 2020 instead of 2019.
  • (Option 2) The second option is to use your average monthly payroll costs incurred in January and February 2020. If you choose this second option, use the following methodology to calculate your maximum loan amount: 
    • Step 1: Fill out an IRS Form 1040 Schedule C for January and February 2020. The entries on the schedule must reflect all business income and expenses from those two months, with the exception that on Schedule C line 13:
      • you must include only 1/6 of the amount of any annual depreciation and section 179 expense deduction attributable to investment made in those months, and
      • you must include 1/6 of the amount of the 2020 depreciation deduction attributable to investment made in prior years.
    • Step 2: Take the net profit amount for January and February on Schedule C line 31  
      • If this amount is more than $16,667 for the two months combined, set it to $16,667. If this amount is less than 0 for the two months combined, set it to 0.
    • Step 3: If you have employees, add your employee payroll costs for January and February 2020 to the result in Step 2. Only include payroll costs for those employees whose principal place of residence is in the United States and up to $16,667 of gross pay per employee.
    • Step 4: Divide the total by 2, and then multiply it by 2.5.
    • Step 5: Add the outstanding amount of any EIDL made between January 31, 2020 and April 3, 2020 that you seek to refinance, less the amount of any advance

Self Employed, Filing Form 1040, Schedule C & In Operation 2/15/20 But Not In Operation Between 2/15/19 & 6/30/19 Required Documents

  • If you chose (Option 1) above, follow the applicable instructions in the Self Employed, Filing Form 1040, Schedule C sections above to determine the required documents based on whether or not you have employees.
  • If you chose (Option 2), you must supply: 
    • All worksheets/spreadsheets that you used to prepare and support your loan amount calculation.
    • Your Form 1040 Schedule C as completed.
      • Your 1040 Schedule C information should be consistent with what you will submit to the IRS and must be true and accurate in all material respects.
    • You must also supply bank statements from your business account(s) for the months of January and February 2020 to substantiate your net profit amount from Schedule C.
    • If you have employees, you must also supply:
      • Payroll records from January and February 2020.
      • Form 941 for the first quarter of 2020.
      • Documentation of any retirement and health/life/disability/vision/dental insurance contributions, if applicable. (Optional: this is only required if used in your calculation.)

Farmers And Ranchers, Filing 1040, Schedule F

  • How you calculate your maximum loan amount depends upon whether or not you employ other individuals.
  • You may use payroll costs for either calendar year 2019 or calendar year 2020 for your loan amount calculation.
    • You must use the same year for all documentation and IRS forms.

Farmers And Ranchers, Filing 1040, Schedule F Without Employees Maximum Loan Amount Calculation

If you have no employees, the following methodology should be used to calculate your maximum loan amount:  

  • Step 1: Find your 2019 or 2020 IRS Form 1040 Schedule F line 9 gross income (if you are using 2020 and you 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 this amount is zero or less, you are not eligible for a PPP loan. 
  • Step 2: Divide the amount from Step 1 by 12.
  • Step 3: Multiply the average monthly gross income amount from Step 2 by 2.5. 
  • Step 4: Add the outstanding amount of any Economic Injury Disaster Loan (EIDL) made between January 31, 2020 and ending on April 3, 2020 that you seek to refinance.  Do not include the amount of any advance under an EIDL COVID-19 loan (because it does not have to be repaid). 

Farmers And Ranchers, Filing 1040, Schedule F Without Employees Required Documents

You must provide:

  • All worksheets/spreadsheets that you used to prepare and support your loan amount calculation.
  • The 2019 or 2020 (whichever you used to calculate loan amount) Form 1040 Schedule F (and Schedule 1 if applicable) with your PPP loan application to substantiate the applied-for PPP loan amount.
    • If using 2020, you must complete and include a draft of 2020 IRS Form 1040 Schedule F (and Schedule 1 if applicable) even if you have not yet filed taxes.
  • A 2019 or 2020 (whichever you used to calculate loan amount) IRS Form 1099-MISC detailing nonemployee compensation received (box 7), invoice, bank statement, or book of record that establishes you are self-employed.
  • You must provide a 2020 invoice, bank statement, or book of record to establish you were in operation on or around February 15, 2020.

Farmers And Ranchers, Filing 1040, Schedule F With Employees Maximum Loan Amount Calculation

If you have employees, the following methodology should be used to calculate your maximum loan amount: 

  • Step 1: Compute 2019 or 2020 payroll (using the same year for all items) by adding the following:  
    • The difference between your 2019 or 2020 Form 1040 Schedule F line 9 gross income amount (if you are using 2020 and you have not yet filed a 2020 return, fill it out and compute the value), and the sum of Schedule F lines 15, 22, and 23, 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, if this amount is less than zero, set this amount at zero;
    • 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 any amounts paid to any individual employee in excess of $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 and any amounts paid to any employee whose principal place of residence is outside the United States; and 
    • 2019 or 2020 employer contributions for employee group health, life, disability, vision and dental insurance (portion of IRS Form 1040 Schedule F line 15 attributable to those contributions), employer contributions for employee retirement contributions (Form 1040 Schedule F line 23), and state and local taxes assessed on employers for employee compensation (primarily under state laws commonly referred to as the State Unemployment Tax Act or SUTA from state quarterly wage reporting forms). 
  • Step 2: Calculate the average monthly amount (divide the amount from Step 1 by 12). 
  • Step 3: Multiply the average monthly amount from Step 2 by 2.5. 
  • Step 4: Add the outstanding amount of any 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 COVID-19 loan (because it does not have to be repaid). 

Farmers/Ranchers, Filing 1040, Schedule F With Employees Required Documents

You must supply:

  • All worksheets/spreadsheets that you used to prepare and support your loan amount calculation.
  • Your 2019 or 2020 (whichever you used to calculate loan amount) Form 1040 Schedule F (and Schedule 1 if applicable).
    • If using 2020, you must complete and include a draft of 2020 IRS Form 1040 Schedule F (and Schedule 1 if applicable) even if you have not yet filed taxes.
  • IRS Form 943 should be provided in addition to, or in place of, IRS Form 941, as applicable, for all quarters
    • If your 2020 Q4 Form 941 or Form 943 is not yet filed, you may use a 2020 Q4 payroll report for that quarter instead .
  • State quarterly wage unemployment insurance tax reporting forms from each quarter in 2019 or 2020 (whichever you used to calculate loan amount) or equivalent payroll processor records (Optional: this is only required if used in your calculation).
  • Evidence of any retirement and health insurance contributions, if applicable (Optional: this is only required if used in your calculation).
  • A payroll statement or similar documentation from the pay period that covered February 15, 2020 must be provided to establish you were in operation on February 15, 2020. 

Note: A farmer or rancher who received a PPP loan before December 27, 2020 may request a recalculation of the maximum loan amount based on the formula described above regarding gross income, if doing so would result in a larger covered loan amount and may receive an increase in its PPP loan based on the recalculation.  


Partnerships, Filing Form 1065

Partnerships Maximum Loan Amount Calculation

Partners’ self-employment income should be included on the partnership’s PPP loan application; individual partners may not apply for separate PPP loans. The following methodology should be used to calculate the maximum amount that partnerships can borrow:  

  • Step 1: Compute 2019 or 2020 payroll (using the same year for all items) by adding
    • (1) 2019 or 2020 Schedule K-1 (IRS Form 1065) Net earnings from self-employment of individual U.S.-based general partners that are subject to self-employment tax, multiplied by 0.9235, up to $100,000 per partner:
      • Compute the net earnings from self-employment of individual U.S.-based general partner that are subject to self-employment tax from box 14a of IRS Form 1065 Schedule K-1 and subtract (i) any section 179 expense deduction claimed in box 12; (ii) any unreimbursed partnership expenses claimed; and (iii) any depletion claimed on oil and gas properties;
    • If this amount is over $100,000, reduce it to $100,000; if this amount is less than zero, set this amount at zero;
    • (2) 2019 or 2020 gross wages and tips paid to your employees whose principal place of residence is in the United States, if any, which can be computed using 2019 or 2020 IRS Form 941 Taxable Medicare wages and 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 and tips, subtracting any amounts paid to any individual employee in excess of $100,000 and any amounts paid to any employee whose principal place of residence is outside the U.S;
    • (3) 2019 or 2020 employer contributions for employee group health, life, disability, vision and dental insurance, if any (portion of IRS Form 1065 line 19 attributable to those contributions);
    • (4) 2019 or 2020 employer contributions to employee retirement plans, if any (IRS Form 1065 line 18); and
    • (5) 2019 or 2020 employer state and local taxes assessed on employee compensation, primarily state unemployment insurance tax (from state quarterly wage reporting forms), if any.  
  • Step 2: Calculate the average monthly payroll costs (divide the amount from Step 1 by 12).  
  • Step 3: Multiply the average monthly payroll costs from Step 2 by 2.5.  
  • Step 4: Add any outstanding amount of any 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 COVID-19 loan (because it does not have to be repaid).

Partnerships Required Documents

You must supply:

  • All worksheets/spreadsheets that you used to prepare and support your loan amount calculation.
  • 2019 or 2020 (whichever you used to calculate loan amount) IRS Form 1065 (including K-1s) and other relevant supporting documentation if the partnership has employees, including
    • 2019 or 2020 (whichever you used to calculate loan amount) IRS Form 941 for all quarters
      • If your 2020 Q4 Form 941 is not yet filed, you may use a 2020 Q4 payroll report instead
      • Other tax forms containing similar information may also be used as applicable for your business (for example, Form 943 for agricultural employers or Form 944 for very small businesses)
    • State quarterly wage unemployment insurance tax reporting form from each quarter (or equivalent payroll processor records or IRS Wage and Tax Statements) (Optional: this is only required if used in your calculation).
    • Records of any retirement or group health, life, disability, vision, and dental insurance contributions. (Optional: this is only required if used in your calculation).
  • If the partnership has employees, a payroll statement or similar documentation from the pay period that covered February 15, 2020 must be provided to establish the partnership was in operation and had employees on that date.
  • If the partnership has no employees, an invoice, bank statement, or book of record establishing the partnership was in operation on February 15, 2020 must instead be provided.

S Corporations & C Corporations

S Corporations & C Corporations Maximum Loan Amount Calculation

The following methodology should be used to calculate the maximum amount that can be borrowed for corporations, including S and C corporations:

  • Step 1: Compute 2019 or 2020 (use the same year for all items) payroll costs by adding the following:
    • 2019 or 2020 gross wages and tips paid to your employees whose principal place of residence is in the United States, up to $100,000 per employee, which can be 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,
      • Minus (i) any amounts paid to any individual employee in excess of $100,000, and (ii) any amounts paid to any employee whose principal place of residence is outside the United States;
    • 2019 or 2020 employer group health, life, disability, vision, and dental insurance contributions (portion of IRS Form 1120 line 24 or IRS Form 1120-S line 18 attributable to those contributions);
    • 2019 or 2020 employer retirement contributions (IRS Form 1120 line 23 or IRS Form 1120-S line 17); and
    • 2019 or 2020 employer state and local taxes assessed on employee compensation, primarily state unemployment insurance tax (from state quarterly wage reporting forms).
  • Step 2: Calculate the average monthly payroll costs (divide the amount from Step 1 by 12).
  • Step 3: Multiply the average monthly payroll costs from Step 2 by 2.5
  • Step 4: Add the outstanding amount of any 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 COVID-19 loan (because it does not have to be repaid).

S Corporations & C Corporations Required Documents

  • All worksheets/spreadsheets that you used to prepare and support your loan amount calculation.
  • Your 2019 or 2020 (whichever you used to calculate loan amount) Form 1120 or 1120-S.
    • If using 2020, you must complete and include a draft of 2020 IRS Form 1120 or 1120-S even if you have not yet filed taxes.
  • Form 941 for all quarters.
    • If your 2020 Q4 Form 941 is not yet filed, you may use a 2020 Q4 payroll report for that quarter instead.
  • State quarterly wage unemployment insurance tax reporting forms from each quarter in 2019 or 2020 (whichever you used to calculate loan amount) or equivalent payroll processor records. (Optional: this is only required if used in your calculation.)
  • Evidence of any retirement and health/life/disability/vision/dental insurance contributions, if applicable. (Optional: this is only required if used in your calculation.)
  • A payroll statement or similar documentation from the pay period that covered February 15, 2020 must be provided to establish you were in operation and has employees on February 15, 2020. 

Nonprofit Organizations Using Form 990

Nonprofit Organization Maximum Loan Amount Calculation

To calculate the maximum loan amount for a nonprofit organization that uses IRS Form 990 or Form 990-EZ, follow the steps below. If the organization doesn't use IRS Form 990 or Form 990-EZ, please refer to the information for nonprofit religious institutions, Veterans organizations, and tribal businesses below.

  • Step 1: Compute 2019 or 2020 payroll costs (using the same year for all items) by adding the following:
    • 2019 or 2020 gross wages and tips paid to your employees whose principal place of residence is in the United States, up to $100,000 per employee, which can be 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, and
      • Minus (i) any amounts paid to any individual employee in excess of $100,000, and (ii) any amounts paid to any employee whose principal place of residence is outside the U.S.;
    • 2019 or 2020 employer group health, life, disability, vision, and dental insurance contributions (portion of IRS Form 990 Part IX line 9 attributable to those contributions);
    • 2019 or 2020 employer retirement contributions (IRS Form 990 Part IX line 8); and
    • 2019 or 2020 employer state and local taxes assessed on employee compensation, primarily state unemployment insurance tax (from state quarterly wage reporting forms).
  • Step 2: Calculate the average monthly payroll costs (divide the amount from Step 1 by 12).
  • Step 3: Multiply the average monthly payroll costs from Step 2 by 2.5.
  • Step 4: Add the outstanding amount of any 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 COVID-19 loan (because it does not have to be repaid).

Nonprofit Organization Required Documents

  • All worksheets/spreadsheets that you used to prepare and support your loan amount calculation.
  • IRS Form 941 from each quarter in 2019 or 2020 (whichever was used to calculate loan amount)
    • Other tax forms containing similar information, equivalent payroll processor records, or IRS Wage & Tax Statements may also be used as applicable for your business
    • If your 2020 Q4 Form 941 is not yet filed, you may use a 2020 Q4 payroll report for that quarter instead
  • Payroll reports from 2019 or 2020 (whichever was used to calculate loan amount)
  • State quarterly wage unemployment insurance tax reporting forms from each quarter in 2019 or 2020 (whichever you used to calculate loan amount), or equivalent payroll processor records (Optional: this is only required if used in your calculation).
  • Filed IRS Form 990 Part IX or other documentation of any retirement and group health, life, disability, vision, and dental insurance contributions (Optional: this is only required if used in your calculation).
    • Eligible nonprofits that file IRS Form 990-EZ should rely on that form
  • A payroll statement or similar documentation from the pay period that covered February 15, 2020 must be provided to establish you were in operation on February 15, 2020.  

Nonprofit Religious Institutions, Veterans Organizations, and Tribal Businesses That Don't Use Form 990

Nonprofit Religious Institutions, Veterans Organizations, and Tribal Businesses Maximum Loan Amount Calculation

To calculate the maximum loan amount for a nonprofit religious institutions, Veterans organization, or tribal business that does not use IRS Form 990, follow the steps below.

  • Step 1: Compute 2019 or 2020 payroll costs (using the same year for all items) by adding the following:
    • 2019 or 2020 gross wages and tips paid to your employees whose principal place of residence is in the United States, up to $100,000 per employee, which can be 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, and
      • Minus (i) any amounts paid to any individual employee in excess of $100,000, and (ii) any amounts paid to any employee whose principal place of residence is outside the U.S.;
    • 2019 or 2020 employer group health, life, disability, vision, and dental insurance contributions;
    • 2019 or 2020 employer retirement contributions; and
    • 2019 or 2020 employer state and local taxes assessed on employee compensation, primarily state unemployment insurance tax (from state quarterly wage reporting forms).
  • Step 2: Calculate the average monthly payroll costs (divide the amount from Step 1 by 12).
  • Step 3: Multiply the average monthly payroll costs from Step 2 by 2.5.
  • Step 4: Add the outstanding amount of any 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 COVID-19 loan (because it does not have to be repaid).

Nonprofit Religious Institutions, Veterans Organizations, and Tribal Businesses Required Documents

  • All worksheets/spreadsheets that you used to prepare and support your loan amount calculation.
  • IRS Form 941 from each quarter in 2019 or 2020 (whichever was used to calculate loan amount)
    • Other tax forms containing similar information, equivalent payroll processor records, or IRS Wage & Tax Statements may also be used as applicable for your business
    • If your 2020 Q4 Form 941 is not yet filed, you may use a 2020 Q4 payroll report for that quarter instead
  • Payroll reports from 2019 or 2020 (whichever was used to calculate loan amount)
  • State quarterly wage unemployment insurance tax reporting forms from each quarter in 2019 or 2020 (whichever you used to calculate loan amount), or equivalent payroll processor records or IRS Wage and Tax Statements. (Optional: this is only required if used in your calculation.)
  • Documentation of any retirement and group health, life, disability, vision, and dental insurance contributions. (Optional: this is only required if used in your calculation).
  • A payroll statement or similar documentation from the pay period that covered February 15, 2020 must be provided to establish you were in operation on February 15, 2020.

Business That Was In Operation 2/15/20 But Not In Operation Between 2/15/19 & 6/30/19

Corporation Or Nonprofit That Was In Operation 2/15/20 But Not In Operation Between 2/15/19 & 6/30/19 Maximum Loan Amount Calculation

If you are a corporation or nonprofit and were in operation on February 15, 2020, but were not in operation between February 15, 2019, and June 30, 2019, you may choose one of two ways to calculate your First Draw PPP Loan amount.

  • (Option 1) The first option is to follow the applicable instructions above, using payroll information for all of 2020 instead of 2019.
  • (Option 2) The second option is to use your average monthly payroll costs incurred in January and February 2020. If you choose this second option, use the following methodology to calculate your maximum loan amount: 
    • Step 1: Compute January and February 2020 payroll costs by adding the following:
      • Gross pay to employees for those two months whose principal place of residence is in the United States, up to $16,667 per employee;
      • Employer group health, life, disability, vision, and dental insurance contributions for those two months;
      • Employer retirement contributions for those two months; and
      • Employer state and local taxes assessed on employee compensation for those two months, primarily state unemployment insurance tax.
    • Step 2: Calculate the average monthly payroll costs (divide the amount from Step 1 by 2).
    • Step 3: Multiply the average monthly payroll costs from Step 2 by 2.5.
    • Step 4: Add any outstanding amount of any 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 COVID-19 loan (because it does not have to be repaid).

Corporation Or Nonprofit That Was In Operation 2/15/20 But Not In Operation Between 2/15/19 & 6/30/19 Required Documents

  • If you chose (Option 1) above, follow the applicable instructions in the sections above to determine the required documents based on whether or not you have employees.
  • If you chose (Option 2), you must supply: 
    • Payroll records from January and February 2020.
    • Your IRS Form 941 for the first quarter of 2020.
    • Documentation of any employer retirement and group health, life, disability, vision, and dental insurance contributions from that period.

Self Employed, Filing Form 1040, Schedule C Or Schedule F (Or Partnership Filing Form 1065) & In Operation 2/15/20 But Not In Operation Between 2/15/19 & 6/30/19 Maximum Loan Amount Calculation

If you are self employed, file form 1040 Schedule C or Schedule F (or a Partnership filing Form 1065), and were in operation on February 15, 2020, but were not in operation between February 15, 2019, and June 30, 2019, you may choose one of two ways to calculate your First Draw PPP Loan amount.

  • (Option 1) The first option is to follow the applicable instructions above, using payroll information for all of 2020 instead of 2019.
  • (Option 2) The second option is to use your average monthly payroll costs incurred in January and February 2020. If you choose this second option, use the following methodology to calculate your maximum loan amount: 
    • Step 1: Fill out an IRS Form 1040 Schedule C [Schedule F Filers: use Schedule F; 1065 Filers: use Form 1065] for January and February 2020. The entries on the schedule must reflect all business income and expenses from those two months, with the exception that on Schedule C line 13 [Schedule F and Form 1065 Filers: use applicable lines]:
      • you must include only 1/6 of the amount of any annual depreciation and section 179 expense deduction attributable to investment made in those months, and
      • you must include 1/6 of the amount of the 2020 depreciation deduction attributable to investment made in prior years.
    • Step 2: Take the net profit amount for January and February on Schedule C line 31. [Schedule F Filers: use gross income amount on Schedule F line 9 if no employees OR the difference between the gross profit amount on Schedule F line 9 and employee payroll costs from the sum of Schedule F lines 15, 22, and 23 if you have employees. Form 1065 Filers: use net earnings from self-employment for each individual U.S.-based general partners (the difference between box 14a of IRS Form 1065 K-1 and the sum of (i) any section 179 expense deduction claimed in box 12; (ii) any unreimbursed partnership expenses claimed; and (iii) any depletion claimed on oil and gas properties) multiplied 0.9235.]
      • If this amount is more than $16,667 for the two months combined, set it to $16,667. If this amount is less than 0 for the two months combined, set it to 0.
    • Step 3: If you have employees, add your employee payroll costs for January and February 2020 to the result in Step 2. Only include payroll costs for those employees whose principal place of residence is in the United States and up to $16,667 of gross pay per employee.
    • Step 4: Divide the total by 2, and then multiply it by 2.5.
    • Step 5: Add the outstanding amount of any EIDL made between January 31, 2020 and April 3, 2020 that you seek to refinance, less the amount of any advance

Self Employed, Filing Form 1040, Schedule C Or Schedule F (Or Partnership Filing Form 1065) & In Operation 2/15/20 But Not In Operation Between 2/15/19 & 6/30/19 Required Documents

  • If you chose (Option 1) above, follow the applicable instructions in the Self Employed, Filing Form 1040, Schedule C sections above to determine the required documents based on whether or not you have employees.
  • If you chose (Option 2), you must supply: 
    • All worksheets/spreadsheets that you used to prepare and support your loan amount calculation.
    • Your Form 1040 Schedule C [Schedule F Filers: Schedule F; Form 1065 Filers: Form 1065] as completed.
      • Your 1040 Schedule C [Schedule F Filers: Schedule F; Form 1065 Filers: Form 1065] information should be consistent with what you will submit to the IRS and must be true and accurate in all material respects.
    • You must also supply bank statements from your business account(s) for the months of January and February 2020 to substantiate your net profit amount from Schedule C.
    • If you have employees, you must also supply:
      • Payroll records from January and February 2020.
      • Form 941 for the first quarter of 2020.
        • Form 943 or 944 may be used as applicable.
      • Documentation of any retirement and health/life/disability/vision/dental insurance contributions, if applicable. (Optional: this is only required if used in your calculation.)

Seasonal Employers

Businesses are defined as Seasonal Employers for the Paycheck Protection Program if:

  • The business does not operate for more than 7 months in any calendar year, OR
  • It had gross receipts for any 6 months of that year that were not more than 33.33% of the gross receipts for the other 6 months of the year.

Seasonal Employers Maximum Loan Amount Calculation

For seasonal employers, the following methodology should be used to calculate your maximum loan amount:

  • Step 1: Aggregate payroll costs for any 12-week period selected by the seasonal employer beginning February 15, 2019 and ending February 15, 2020.
  • Step 2: Subtract any compensation paid to an employee in excess of $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.
  • Step 3: Calculate average monthly payroll costs (divide the amount from Step 2 by 3). 
  • Step 4: Multiply the average monthly payroll costs from Step 3 by 2.5.
  • Step 5: Add the outstanding amount of an 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 COVID-19 loan (because it does not have to be repaid). 

Seasonal Employer Required Documents

You must provide:

  • Worksheets/spreadsheets that you used to prepare and support your loan amount calculation
  • Form 941 for all quarters
    • Other tax forms containing similar information may also be used as applicable for your business (for example, Form 943 for agricultural employers or Form 944 for very small businesses)
    • If your 2020 Q4 Form 941 is not yet filed, you may use a 2020 Q4 payroll report for that quarter instead
  • State quarterly wage unemployment insurance tax reporting forms from each quarter in 2019 or 2020 (whichever you used to calculate loan amount), or equivalent payroll processor records (Optional: this is only required if used in your calculation).
  • Evidence of any retirement and health insurance contributions (Optional: this is only required if used in your calculation).
  • A payroll statement or similar documentation from the pay period that covered February 15, 2020 must be provided to establish you were in operation on February 15, 2020.