Below are the steps for calculating Payroll Protection Plan (PPP) payroll costs when applying for a PPP 2 loan:
Compute each partner or member’s individual payroll costs by adding the following:
Net earnings from self-employment of individual U.S.-based general partners 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.
Multiply this amount by .9235. (The .9235 calculation removes the partnership entity’s share of self-employment tax).
If this amount is over $100,000, reduce it to $100,000. If this amount is less than zero, set this amount at zero.
The information presented here should not be construed as legal, tax, accounting, or valuation advice. No one should act on such information without appropriate professional advice and after a thorough examination of the particular situation.