INTERESTING IF THEY WILL CHANGE IT FOR GENERAL PARTNERS AFTER THE NEW GUIDELINES THAT THEY MUST TAKE AN ACTUAL DRAW, HOWEVER AS TO SP IT SEEMS TO STAND ACCORDING TO THIS
https://news.bloombergtax.com/daily-tax-report/insight-the-taxation-of-payroll-protection-program-loans-and-loan-forgiveness-62Favorable Tax Treatment of Self-Employed Individuals and General Partners
Another key issue regarding the taxation of PPP loans is the disparate, and favorable, treatment afforded self-employed individuals and general partners in partnerships. For these two classes of borrowers, they will receive tax-free loan forgiveness like everyone else, but they will not suffer expense disallowance with regard to their owner compensation replacement amounts because such amounts are not otherwise deductible, i.e., there are no deductions to disallow.
Thus, a self-employed individual filing Schedule C with her Form 1040 income tax return will realize tax-free income of up to $15,385 if she uses an 8-week covered period on her PPP loan, and up to $20,833 if she uses a 24-week covered period on her PPP loan. The same result will obtain for a general partner in a partnership that receives a draw (as opposed to a guaranteed payment) for her owner compensation replacement amount. Note this favorable treatment applies only to the owners compensation replacement amounts of self-employed individuals and general partners, and it does not apply to any payroll costs of employees.
These favorable disparities (though whether they are viewed as favorable depends on one’s vantage point) are not the result of special tax rules under the PPP. Instead, they arise from general tax principles and from the fact that the tax-free loan forgiveness amount is the salary for these folks. There is no third party receiving tax-free income and then claiming a deduction for the payment of salary to them. A similarly-situated employee that works for a corporation, partnership, or self-employed individual will not receive this same beneficial tax treatment because they are receiving a taxable salary from their employer, and the employer is the person that received tax-free loan forgiveness (and expense disallowance). The IRS is aware of this issue and may issue further guidance.