For Farmers and Ranchers, New PPP Loan Calculations

For Farmers and Ranchers, New PPP Loan Calculations

01/18/2021 Tags: Announcements, In the News, COVID-19, PPP


The new Economic Aid Act changes how Payroll Protection Program loans are calculated for farmers and ranchers. With these new updates, more ag producers may now qualify for a PPP loan.

Previously, the government calculated PPP loan amounts using net farm income. Under the new law, ag producers should use gross farm income up to $100,000. That income is shown on line 9 of Schedule F of 1040 tax returns.

Ag producers can use the new calculation to:

  • Request a first PPP loan if they didn’t get one in 2020;
  • Request an increase to a loan they did receive in 2020. The catch for this, though, is that the loan can’t have already been forgiven; or
  • Request a second PPP loan if they did previously get a loan and otherwise qualify.

The new rule applies to farmers and ranchers who:

  1. Operate as a sole proprietorship, an independent contractor, or are an eligible self-employed individual;
  2. Report farm income or expenses on a Schedule F of 1040 return or any equivalent successor schedule; and
  3. Were in business as of Feb. 15, 2020.

The Economic Aid Act says ag producers should use 2019 to calculate their max loan amount; however, the SBA’s interim final rule says to use 2019 or 2020 as the base period.

Calculating your payroll costs for your farm and ranch can get a bit tricky — depending on whether you have employees. You can see the SBA’s instructions in their interim final rule on page 37, section d. But as always, if you need help calculating your payroll costs, please let us know.

If you’re a farmer or rancher who received a PPP loan before Dec. 27, 2020 — and it hasn’t been forgiven — you can ask for a recalculation of your maximum loan amount. The formula to determine your max amount would be based on your gross income.

If you want to submit a request for an increase, you’ll need to do so electronically in E-Tan on or before March 31, 2021. Also, when applying for a PPP loan, you’ll need to make a “good faith certification.” You can see those requirements on page 55, question No. 12, of the SBA’s interim final rules.

If you have any questions about PPP — or anything else related to your finances during the pandemic — let us know how we can help.



This communication is intended to provide general information on legislative COVID-19 relief measures as of the date of this communication and may reference information from reputable sources. Although our firm has made every reasonable effort to ensure that the information provided is accurate, we make no warranties, expressed or implied, on the information provided. As legislative efforts are still ongoing, we expect that there may be additional guidance and clarification from regulators that may modify some of the provisions in this communication. Some of those modifications may be significant. As such, be aware that this is not a comprehensive analysis of the subject matter covered and is not intended to provide specific recommendations to you or your business with respect to the matters addressed.



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