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Kurt Fagan
Partner
Asked a question 10 days ago

I am having trouble understanding affiliation rules... I have a client that owns 100% of an S-Corp of which he is a W-2 EE (active in the business) and also has a separate Sole Prop. The S-Corp did better than 2019 in 2020 and so it does NOT qualify for PPP2. His Sole Prop DOES qualify with a 40% reduction in gross receipts year over year. My understanding of affiliation rules is that we need to combine the gross receipts together of both companies, S-Corp, and the Sole Prop, and then analyze the change in gross receipts of the total combined amount to determine if he still qualifies. Is that correct? Is that how affiliation rules work? Appreciate your input!

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