I hope you have managed to stay safe and well! We focus on resolving tax issues in Prince William County and throughout the lower Northern Virginia area.

Here’s what you need to know.

The changes— the administration has proposed five key changes.

1. A two-week application period just for small businesses. Starting on Wednesday and through March 9^th, the administration will only allow business with fewer than 20 employees to apply for relief. The 14-day period will allow lenders to focus on serving these smallest businesses.
2. More help for sole proprietors, independent contractors, and self-employed individuals. The Biden-Harris administration is reviewing the loan calculation formula for sole proprietors, independent contractors and the self-employed. While we don’t have the details on the new calculation, this will be a very important change. The administration points out that 70 percent of businesses without employees are owned by women and people of color. The administration will also set aside $1 billion for business in this category without employees located in low and moderate-income (LMI) areas.
3. Reduced barriers for former felons.  The administration plans to increase access to applications who have either: (1) an arrest or conviction for a felony related to financial assistance fraud within the previous five years; or (2) any other felony within the previous year. This would be consistent with the bipartisan the proposed PPP Second Chance Act.
4. Assistance for business owners who are late on student loans. The administration will also increase access to business owners who are currently delinquent or have defaulted within the last seven years on a federal debt, including a student loan.
5. More access for business owners who aren’t U.S. citizens. New provisions would allow non-citizen small business owners who are lawful U.S. residents to may use Individual Taxpayer Identification Numbers (ITINs) to apply for relief. In addition, the administration will allow access to PPP for lawful US residents with an ITIN like Green Card holders and those here on a visa.

The hope is that these changes will address the disparity in funding among the nation’s smallest business, and the bigger brethren

What we still need to know:

What will the new formula for sole proprietors and independent contractors actually be?

Most small business owners without employees will be looking carefully for how this new formula works. I’ve heard that the new calculation will now base the maximum loan amount on gross business income, rather than net. Too bad it wasn’t in effect for the first go around, this would’ve saved a large number of small business owners a small fortune in taxes. But, this change could have increased the size of some of our business’s clients’ PPP loans by 250 to 300%. We’re hoping that the rumor that this formula will be retroactive for those sole proprietors who have already applied is true, of course. More details to come.

We’ve helped a multitude of businesses qualify for, and obtain a PPP Loan during the first round of funding throughout 2020, and during this second round of 2021.  Whether you’d like to attempt to qualify for a first round “draw”, or need assistance with documenting the qualifications for a second round “draw”, we are here to assist you.  Feel free to contact us with any questions you may have about the PPP.