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April 2, 2022
Question

Sole proprieter with PPP loan income

  • April 2, 2022
  • 1 reply
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My wife works for herself as a cosmetologist and secured a PPP loan in 2021 to cover a portion of her rent and supplement her reduced income due to Covid. The loan was successfully forgiven. Since she "paid" herself a certain amount for 16 weeks during 2021, is that considered taxable income?

1 reply

April 2, 2022

No, none of the PPP loan is considered income.   There were limits to what PPP funds could be used to pay.   In order for the loan to be forgiven your wife needed to use at least 60% for wages.   She can also deduct the amount she spent on wages.  The remaining 40% was limited to electricity, gas, water, transportation, telephone, or internet access.