First, in place of Schedule C line 31 (net profit), the difference between Schedule F line 9 (gross income) and the sum of Schedule F lines 15, 22, and 23 (for employee payroll) should be used. The calculation for self-employed farmers and ranchers with employees is the same as for Schedule C filers that have employees with several exceptions. The calculation for self-employed farmers and ranchers without employees is the same as for Schedule C filers that have no employees, except that Schedule F line 9 (gross income) should be used to determine the loan amount rather than Schedule C line 31 (net profit). What documentation must I provide in place of Schedule C and how should my maximum loan amount be determined (up to $10 million)?Īnswer: Self-employed farmers and ranchers (i.e., those who report their net farm profit on IRS Form 1040 Schedule 1 and Schedule F) should use IRS Form 1040 Schedule F in lieu of Schedule C. Question: I am a self-employed farmer or rancher who reports my income on IRS Form 1040 Schedule F. The document is updated in question 3 to reflect the revised calculations available for sole proprietor self-employed farmers and ranchers. Revision to the Calculation for Farmers and Ranchers Payroll costs, including for covered benefits, can only be included for employees whose principal place of residence is in the United States. In a footnote the document indicates that the year chosen must be used for all calculations:Īll components of payroll costs must be from the same calendar year. Documentation, including IRS forms, must be supplied for the selected reference period. However, borrowers are permitted to use payroll costs from either calendar year 2019 or calendar year 2020 for their First Draw PPP Loan amount calculation. The guidance describes payroll costs using calendar year 2019 as the reference period for payroll costs used to calculate loan amounts. The revised guidance begins with a note that while the SBA’s calculations often refer to 2019 information to compute the maximum borrowing, in the IFRs issued on Janudescribing the revisions found in the Economic Aid Act, the SBA allows the use of calendar year 2020 as well: The SBA has updated its FAQ computing the maximum first draw PPP loan amounts following the passage of the Economic Aid Act in December of 2020.

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