Home Office Expense Ppp

Any interest paid on mortgage on property used for business purposes is an eligible expense that the ppp can be used for. If you want to get your ppp loan forgiven at least 75 of the funds must be used on payroll expenses and the remainder on rent or lease payments mortgage interest and utilities. By owen yin on june 4 2020.

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If you were eligible to claim a certain home office expense but didn t for whatever reason you can still use the ppp funds to pay for it over your eight week forgiveness period and qualify for forgiveness on that expense.

Home office expense ppp. For these borrowers the 8 week forgiveness period has begun and they are beginning to plan. How sole proprietors can make sure ppp loans are forgiven. Many sole proprietors work out of their home and home office expense costs are not eligible. The sample application for loan forgiveness came out friday may 15th and while it s not as clear as we d all like it provides more guidance than before.

But the definition of utilities for the purpose of the ppp is actually more robust than what is considered a utility for your tax return. As long as they fit within the categories of utilities rent and mortgage interest home office expenses can be forgiven. Hanley said the treasury department. Divide the number of rooms used for business by the total number of rooms in the home use this method if the number of rooms is about the same.

Let s walk through this application. For those that have a home office you can claim a portion of the mortgage rent and utilities based on the percentage of your home used as a home office. If i did not claim a home office expense in 2019 can i use the ppp for it. Home office deductions and the ppp this post is to be used for informational purposes only and does not constitute legal business or tax advice.

So if your home office space is 200 square feet and your home is 2000 square feet you would claim 10 200 2000 of your home related expenses insurance taxes mortgage interest etc as a. Review this list of qualified expenses for maximum forgiveness on your loan though the initial round of payroll protection plan ppp loans are exhausted small business owners that applied and were approved in time are now receiving their loan proceeds. If you worked in an office space in 2019 and did not have a home office you could not have claimed a deduction on your home mortgage interest. Proceeds from the ppp loan can be used to cover your mortgage rent office lease utilities payroll costs and your net self employment earnings.

Yes the sba s interim final rule makes an exception for this. For example if your home is 2000 square feet and your home office is 400 square feet your office space is 20 of the total area of your home.