ICBA-supported legislation allowing farmers and ranchers categorized as partnerships to use gross income to calculate maximum Paycheck Protection Program loan amounts was introduced in the House.
Background: Farmers and ranchers without payroll or positive net income in 2019 were shut out of the original Paycheck Protection Program. Congress changed this limitation to be based on gross income, but SBA guidance has required farm partnership applicants to use net income from their schedule K-1.
Pending: A pending revision to the SBA's loan calculation formula for sole proprietors, independent contractors, and self-employed individuals will reportedly use gross income instead of net income. A bipartisan group of lawmakers last week told SBA it has the authority to use gross income for farm partnerships.
What's New: A bipartisan bill from Rep. Jim Hagedorn (R-Minn.) and others would allow the use of gross income and retroactively enable producers who used net income to recalculate their PPP loans if they have not been forgiven.
ICBA Position: ICBA has long advocated using gross income in lieu of net income to show positive income and allow these entities to qualify for the PPP.