PPP loan my business is a partnership only 2 employees pay ourselves with a monthly draw

Partnership LLC. 2 owners we pay ourselves with monthly draws. Can we apply for the PPP loan? Can anyone help 

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Hi @Heartwornvintag,

 

With LLC's, your tax liability is placed directly on the owners (yourself) and not the business. Your payroll cost is the earnings you are taxed on, which is the amount of your net profit (your full taxable income) not the draws. As the PPP asks for average monthly payroll, you will take the 2019 net profit and divide it by 12. As your self-employment tax is based on your net profit. Your ownership stake in the company determines the amount of business profit passes through to you for individual taxation.

 

I will update this if the SBA provides further guidance on partnerships, but both of you are likely filing in this case.

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Thanks so much for your help!!

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