PPP rules for partnerships reversed on April 14

[Michael Plaks]

Today, 4/14/2020, the SBA issued their 3rd "Interim Final Rule" (what a name!) in 2 weeks, reversing the method of applying for PPP loans/grants for partnership.

https://home.treasury.gov/system/files/136/Interim-Final-Rule-Additional-Eligibility-Criteria-and-Requirements-for-Certain-Pledges-of-Loans.pdf

"...However, if you are a partner in a partnership, you may not submit a separate PPP loan application for yourself as a self-employed individual. Instead, the self-employment income of general active partners may be reported as a payroll cost, up to $100,000 annualized, on a PPP loan application filed by or on behalf of the partnership."

Too bad for those partnerships that already filed for PPP without including their active partners' compensation. We all thought it was the right procedure - until today. Oh well...

By the way, this same rule confirmed that PPP applications for self-employed investors must be based on their net income from 2019 Sch C. That part we sorta figured out before the official rule, but not the partnership rule.