New PPP Rules for Farmers
Farmers Could See Bigger Payments Under New PPP Rules
By Katie Micik Dehlinger, Progressive Farmer/DTN
MT. JULIET, Tenn. (DTN) -- Farmers largely missed out on the first round of Paycheck Protection Program loans, but a change in how calculations are made for farmers could result in more substantial payments.
The first round tabulated payments based on farmers' net income, which is income after deductions and expenses. This number is often low or negative because of the amount of depreciation farmers claim on equipment. For 2021, farmers can use their gross income to apply.
"That was a little bit of a handicap to those who were seeking a PPP loan, and Congress listened," Kristine Tidgren, an associate professor at Iowa State University's Center for Agricultural Law and Taxation, said during the Illinois Soybean Association's virtual 2021 Soybean Summit. "In the case of a self-employed farmer, the way you're entitled to spend it is owner compensation. Meaning that you get to actually have that money as income to yourself, kind of like a paycheck for the self-employed."
Farmers and small businesses can apply for PPP loans through their traditional lenders such as banks and Farm Credit institutions.
The loans are forgivable as long as...