Home Office Expense Ppp Loan

You can deduct these expenses at 100 because they are only related to your business. 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. Proceeds from the ppp loan can be used to cover your mortgage rent office lease utilities payroll costs and your net self employment earnings.

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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 loan. 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. Ppp loans in excess of 2 million check box. Not eligible for ppp loan forgiveness. How to track spending for on non allowable expenses.

Yes the sba s interim final rule makes an exception for this. You can spend ppp funds received on non allowed expenses but know those expenses won t be forgiven you will have to repay them along with loan interest. No part of the home office expense can be paid or forgiven from the ppp loan amount. The funds from the ppp can be used for the following purposes.

If the loan is used for this purpose it must be repaid. The loan amount is based on your average monthly payroll cost for 2019. Let s first review the terms of the ppp. For self employed individuals with a home office you apply the percentage used for your home office deduction to determine allocable mortgage interest rent and utilities.

Typical indirect expenses include rent mortgage interest utilities insurance and general home. Last week the treasury updated its faqs to let us know that borrowers with loans below 2 million would be presumed to have taken the loan in good. You can receive 2 5 times that amount to help cover eight weeks of payroll. You must have claimed or be entitled to claim a deduction for such expenses on your 2019 form 1040 schedule c for them to count toward ppp loan forgiveness.

Interest payments on any other debt obligations that were incurred before february 15 2020 note. Home related expenses are explicitly prohibited in the interim final guidance on ppp loans. Payroll salary wage vacation parental family medical or sick leave health benefits. Many sole proprietors work from home.

If i did not claim a home office expense in 2019 can i use the ppp for it. For these borrowers the 8 week forgiveness period has begun and they are beginning to plan. So a home based proprietor will have zero additional expenses to count towards the ppp. The ppp loan must be repaid within two years the interest rate is a low 1 percent.

Indirect expenses are those paid for running your home which can be deducted based on the percentage of the home used for business ex. Even if they take a home office deduction on their tax return they cannot count those expenses toward ppp forgiveness.