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Second Draw PPP Loan Maximum Amounts

The information below provides guidance for:

  • Calculating the maximum amount of Second Draw 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 Second Draw Paycheck Protection Program (PPP) Loans: How to Calculate Revenue Reduction and Maximum Loan Amounts Including 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 amount from Step 2 by 2.5. OR multiply by 3.5 if your business is in the Accommodation and Food Services sector (NAICS Code 72) and the business activity code reported on your most recent IRS Form 1040 Schedule C line B begins with 72. This amount cannot exceed $29,167 for NAICS code 72 borrowers and $20,833 for all other borrowers.

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.
  • Required revenue reduction documentation. See our Revenue Reduction Information page for detailed guidance on how to compare revenue and what documentation is required.
  • 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. OR multiply by 3.5 if your business is in the Accommodation and Food Services sector (NAICS Code 72) and the business activity code reported on your most recent IRS Form 1040 Schedule C line B begins with 72.

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.
  • Required revenue reduction documentation. See our Revenue Reduction Information page for detailed guidance on how to compare revenue and what documentation is required.
  • 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 For The Full One-Year Period Preceding 2/15/20 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 for the full one-year period preceding 2/15/20, your maximum Second Draw PPP Loan amount is the average monthly payroll based on the number of months in which you were in operation from 2019 through the end of calendar year 2020, excluding costs over $100,000 on an annualized basis.

  • Step 1: Compute total applicable owner compensation across 2019 (if in operation that year) and 2020 income tax returns:
    • For self-employed Schedule C filers, it is the sum of the value of Form 1040 Schedule C line 31 net profit.
      • If this amount is less than zero, set this amount to zero;
  • Step 2: If the amount from Step 1 is greater than the product of $8,333 and the number of months in operation from 2019 through the end of 2020, set it to this value.
  • Step 3: If the entity has employees, add the amount computed from following the instructions below, otherwise add zero.
    • Gross wages and tips paid to your employees whose principal place of residence is in the United States, up to $100,000 per employee annualized, which can be computed using:
      • IRS Form 941 Taxable Medicare wages & tips (line 5c-column 1) from each quarter the business was in operation,
      • 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 the product of $8,333 and the number of months in operation through 2020, and (ii) any amounts paid to any employee whose principal place of residence is outside the United States;
    • Employer group health, life, disability, vision, and dental insurance contributions;
    • Employer retirement contributions; and
    • Employer state and local taxes assessed on employee compensation, primarily state unemployment insurance tax (from state quarterly wage reporting forms).
  • Step 4: Calculate the average monthly payroll costs (add Step 2 and Step 3 together and then divide that sum by the number of months in operation from 2019 through the end of 2020).
  • Step 5: Multiply the average monthly payroll costs from Step 4 by 2.5. OR multiply by 3.5 if your business is in the Accommodation and Food Services sector (NAICS Code 72) and the business activity code reported on your most recent IRS Form 1040 Schedule C line B begins with 72.

Self Employed, Filing Form 1040, Schedule C & In Operation 2/15/20 But Not In Operation For The Full One-Year Period Preceding 2/15/20 Required Documents

  • All worksheets/spreadsheets that you used to prepare and support your loan amount calculation.
  • Required revenue reduction documentation. See our Revenue Reduction Information page for detailed guidance on how to compare revenue and what documentation is required.
  • Your applicable income tax return (Form 1040 Schedule C) from 2019 (if applicable) and 2020 must be provided to substantiate the applied-for Second Draw PPP loan amount.
    • 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.
  • If you had employees:
    • Your IRS Form 941s for each quarter
      • 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 form from each quarter the entity was in operation (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.)
  • Additionally, 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 had employees on that date. If you did not have employees, an invoice, bank statement, or book of record establishing you was in operation on February 15, 2020 must instead be provided.

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. 

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.
  • Required revenue reduction documentation. See our Revenue Reduction Information page for detailed guidance on how to compare revenue and what documentation is required.
  • 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. 

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.
  • Required revenue reduction documentation. See our Revenue Reduction Information page for detailed guidance on how to compare revenue and what documentation is required.
  • 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 costs (using the same year for all items) by adding
    • (1) 2019 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.  OR multiply by 3.5 if your business is in the Accommodation and Food Services sector and the business activity code reported on your most recent IRS Form 1065 Line C begins with 72.

Partnerships Required Documents

You must supply:

  • All worksheets/spreadsheets that you used to prepare and support your loan amount calculation.
  • Required revenue reduction documentation. See our Revenue Reduction Information page for detailed guidance on how to compare revenue and what documentation is required.
  • 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 payroll costs by adding the following:
    • 2019 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 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 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 employer retirement contributions (IRS Form 1120 line 23 or IRS Form 1120-S line 17); and
    • 2019 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 OR multiply by 3.5 if your business is in the Accommodation and Food Services sector and the business activity code reported on your most recent IRS Form 1120 Schedule K, line 2A (IRS Form 1120-S item B) begins with 72.

S Corporations & C Corporations Required Documents

  • All worksheets/spreadsheets that you used to prepare and support your loan amount calculation.
  • Required revenue reduction documentation. See our Revenue Reduction Information page for detailed guidance on how to compare revenue and what documentation is required.
  • 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 OR multiply by 3.5 if your business is in the Accommodation and Food Services sector and the business activity code reported on your most recent IRS Form 990 Part VIII, adjacent to line 2A begins with 72.

Nonprofit Organization Required Documents

  • All worksheets/spreadsheets that you used to prepare and support your loan amount calculation.
  • Required revenue reduction documentation. See our Revenue Reduction Information page for detailed guidance on how to compare revenue and what documentation is required.
  • 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 OR multiply by 3.5 if your business is in the Accommodation and Food Services sector (NAICS code that begins with 72, e.g., a hotel, restaurant, bar).

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

  • All worksheets/spreadsheets that you used to prepare and support your loan amount calculation.
  • Required revenue reduction documentation. See our Revenue Reduction Information page for detailed guidance on how to compare revenue and what documentation is required.
  • 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 For The Full One-Year Period Preceding 2/15/20

Corporation Or Nonprofit That Was In Operation 2/15/20 But Not In Operation For The Full One-Year Period Preceding 2/15/20 Maximum Loan Amount Calculation

If you are a corporation or nonprofit and were in operation on February 15, 2020, but weren't in operation for the full one-year period preceding February 15, 2020, use the following methodology to calculate the maximum amount that can be borrowed:

  • Step 1: Compute total payroll costs from when first in operation in 2019 or 2020 through the end of calendar year 2020 by adding the following:
    • Gross wages and tips paid to your employees whose principal place of residence is in the United States, up to $100,000 per employee annualized, which can be computed using:
      • IRS Form 941 Taxable Medicare wages & tips (line 5c-column 1) from each quarter the business was in operation,
      • 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 the product of $8,333 and the number of months in operation through 2020, and (ii) any amounts paid to any employee whose principal place of residence is outside the United States;
    • Employer group health, life, disability, vision, and dental insurance contributions;
    • Employer retirement contributions; and
    • 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 number of months in operation from 2019 through the end of 2020).
  • Step 3: Multiply the average monthly payroll costs from Step 2 by 2.5. Or multiply by 3.5 if your business is in the Accommodation and Food Services sector and the business activity code reported on your most recent income tax return (Form 1120 Schedule K, line 2A for corporations, Form 1120-S item B for S-corporations, and Form 990 Part VIII, adjacent to line 2A for nonprofits) begins with 72.

Corporation Or Nonprofit That Was In Operation 2/15/20 But Not In Operation For The Full One-Year Period Preceding 2/15/20 Required Documents

  • All worksheets/spreadsheets that you used to prepare and support your loan amount calculation.
  • Required revenue reduction documentation. See our Revenue Reduction Information page for detailed guidance on how to compare revenue and what documentation is required.
  • The entity’s IRS Form 941 from each quarter the entity was in operation
    • 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 the entity was in operation 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 Or Schedule F (Or Partnership Filing Form 1065) & In Operation 2/15/20 But Not In Operation For The Full One-Year Period Preceding 2/15/20 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 weren't in operation for the full one-year period preceding February 15, 2020, your maximum Second Draw PPP Loan amount is the average monthly payroll based on the number of months in which you were in operation from 2019 through the end of calendar year 2020, excluding costs over $100,000 on an annualized basis.

  • Step 1: Compute total applicable owner compensation across 2019 (if in operation that year) and 2020 income tax returns:
    • For self-employed Schedule C filers, it is the sum of the value of Form 1040 Schedule C line 31 net profit.
      • If this amount is less than zero, set this amount to zero;
    • For self-employed farmer or rancher with no employees, it is the sum of the value of Form 1040 Schedule F line 9 gross income.
    • For self-employed farmer or rancher with employees, it is the sum of difference between the gross income amount on Form 1040 Schedule F line 9 and employee payroll costs from the sum of Form 1040 Schedule F lines 15, 22, and 23.
      • If this amount is less than zero, set this amount to zero.
    • For partnerships, it is the sum of 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.
      • 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 less than zero, set this amount to zero.
  • Step 2: If the amount from Step 1 is greater than the product of $8,333 and the number of months in operation from 2019 through the end of 2020, set it to this value.
    • For partnerships, this cap applies separately to each general partner.
  • Step 3: If the entity has employees, add the amount computed from adding below items, otherwise enter 0.
    • Gross wages and tips paid to your employees whose principal place of residence is in the United States, up to $100,000 per employee annualized, which can be computed using:
      • IRS Form 941 Taxable Medicare wages & tips (line 5c-column 1) from each quarter the business was in operation,
      • 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 the product of $8,333 and the number of months in operation through 2020, and (ii) any amounts paid to any employee whose principal place of residence is outside the United States;
    • Employer group health, life, disability, vision, and dental insurance contributions;
    • Employer retirement contributions; and
    • Employer state and local taxes assessed on employee compensation, primarily state unemployment insurance tax (from state quarterly wage reporting forms).
  • Step 4: Calculate the average monthly payroll costs (add Step 2 and Step 3 together and then divide that sum by the number of months in operation from 2019 through the end of 2020).
  • Step 5: Multiply the average monthly payroll costs from Step 4 by 2.5 OR multiply by 3.5 if your business is in the Accommodation and Food Services sector and the business activity code reported on the most recent income tax return (IRS Form 1040 Schedule C line B for self-employed who are not farmers or ranchers and Form 1120-S item B for partnerships) begins with 72.

Self Employed, Filing Form 1040, Schedule C Or Schedule F (Or Partnership Filing Form 1065) & In Operation 2/15/20 But Not In Operation For The Full One-Year Period Preceding 2/15/20 Required Documents

  • All worksheets/spreadsheets that you used to prepare and support your loan amount calculation.
  • Required revenue reduction documentation. See our Revenue Reduction Information page for detailed guidance on how to compare revenue and what documentation is required.
  • Your applicable income tax return (Form 1040 Schedule C, Form 1040 Schedule F, or Form 1065 (including K-1s)) from 2019 (if applicable) and 2020
    • You must complete and include a draft of your 2020 income tax return even if it is not yet filed.
  • If you had employees:
    • Your IRS Form 941s for each quarter
      • 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 form from each quarter the entity was in operation (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.)
  • Additionally, 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 had employees on that date. If you did not have employees, an invoice, bank statement, or book of record establishing you was in operation on February 15, 2020 must instead be provided.