Benefits / Resources / Articles
April 14, 2021

Letter to the Hill - Paycheck Protection Program income calculation for independent contractors

Professional Photographers of America and 15 other organizations recently submitted the following letter to leadership on Capitol Hill regarding the new calculation for independent contractors under the Payment Protection Program (PPP).

The Honorable Charles Schumer – Senate Majority Leader, United States Senate

The Honorable Nancy Pelosi – Speaker, United States House of Representatives

The Honorable Mitch McConnell – Senate Minority Leader, United States Senate

The Honorable Kevin McCarthy – House Minority Leader, United States House of Representatives

The Honorable Ben Cardin – Chairman, Senate Committee on Small Business and Entrepreneurship

The Honorable Rand Paul – Ranking Member, Senate Committee on Small Business and Entrepreneurship

The Honorable Nydia Velázquez – Chairwoman, House Committee on Small Business

The Honorable Blaine Luetkemeyer – Ranking Member, House Committee on Small Business


RE:  Paycheck Protection Program income calculation for independent contractors


Dear Senate Majority Leader Schumer, Speaker Pelosi, Senate Minority Leader McConnell, House Minority Leader McCarthy, Chairman Cardin, Chairwoman Velázquez, Ranking Member Paul, and Ranking Member Luetkemeyer,

We as 16 organizations advocating on behalf of independent workers write today to express deep concern about the millions of freelance and self-employed workers who are experiencing unprecedented income loss because of the COVID-19 pandemic and have been unable to access full government assistance that they desperately need. Recent changes to how the Paycheck Protection Program (PPP) were a step in the right direction, however, key elements of the program have resulted in freelancers not qualifying for sufficient assistance, and in some cases being shut out from relief entirely.

On March 3rd, the SBA issued a rule announcement which made much needed changes to the Paycheck Protection Program; one major change to PPP is how income is calculated. Independent contractors are now able to calculate PPP loan amounts using gross income instead of net profit. 

This change has been beneficial to freelancers, however, that benefit only extends to freelancers who applied for a PPP loan after the passage of the rule. Freelancers who applied for the second round of PPP loans early not only received loans that reflected net income, but they have also been denied access to amend their loans to reflect the rule change that calculates gross income. Currently, there is no mechanism to fill that gap.

We have had several conversations with the Small Business Administration (SBA) regarding this matter. Freelancers have had similar conversations with their lenders. It is to their understanding that SBA does not have the power to change the rule or offer retroactive funding to freelancers who received funding under the net income calculation without Congressional approval or legislation.

We are asking that you initiate legislation to allow the sole proprietors who originally calculated their loans using Schedule C, line 31, to retroactively have their loan calculated using Schedule C, line 7.  It would be as easy as allowing previous first and/or second-round loan recipients to re-apply, and then subtracting their original amount received from the calculated loan using the new rules.

This same situation has also happened to all companies with employees. If a business has already filed its PPP forgiveness application, it cannot go back and amend its application to maximize its Employee Retention Tax Credit (ERTC). There is precedent within these new government programs for amending a form previously filed due to a new rule. For individual taxpayers who received unemployment in 2020 and already filed their 2020 tax return, they can receive a refund based on the new tax. The inability to amend a PPP forgiveness application is unfair to companies diligent in filing the paperwork required by the SBA.

We ask that Congress include a provision that would allow SBA to retroactively calculate gross income and require lending institutions to amend applications. I urge you to prioritize these policy changes to fairly include freelancers in government relief and provide needed support to the millions of freelance workers that drive our country forward.



Professional Photographers of America

Actor’s Equity Association

American Photographic Artists

Authors Guild

Cerf+ The Artist Safety Net

Freelancers Union

Future of Music Coalition

Grammy Recording Academy

Graphic Artists Guild

Music Artists Coalition

Music Managers Forum - US (MMF-US)

Musicians For Musicians

National Music Publishers’ Association

National Writers Union

North American Nature Photography Association


Songwriters Guild of America

SongWriters of North America

St. Louis Volunteer Lawyers and Accountants for the Arts