Tax Monitor

SBA’s Twenty-Second IFR Addresses PPP guidance for Commercial Fishing Boat Owners and Crewmembers

June 26, 2020

By: Mark A. Mangano

Last night the SBA issued its 22nd IFR addressing the treatment of PPP forgiveness for commercial fishing boat owners and crewmembers working on the boats that are considered independent contractors or self-employed for certain tax purposes under 26 U.S.C. 3121(b)(20) of the Internal Revenue Code. If the boat owner included payments to crewmembers in a PPP loan, the boat owner can treat the crewmembers as employees in a forgiveness application as long as the crewmembers are not applying for forgiveness for a PPP loan that they obtained for themselves. The boat owner is required to confirm whether any of its crewmembers during the covered period for loan forgiveness received their own PPP loans. Due to the increased risk of duplicate payroll costs, PPP loans to fishing boat owners are more likely to be subject to and SBA review.