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COVID-19 Disaster Relief for Businesseses and Individuals

Updated: Jun 18, 2020





During this unfortunate time there are some reliefs for small business owners, self employed, 1099 contractors, employees even retirees!



 

Already have a SBA loan? (7(a), 504 or Micro)

The SBA Debt Relief program - SBA will automatically pay the principal, interest, and fees.


 

EIDL Economic Injury Disaster Loan


This loan was originally said to be a loan up to $2 million at 3.75% for-profit and 2.75% for non-profit with a $10,000 advance within 3 days.

Since then clients have been getting emails that due to the high demand this loan will currently be giving an option to get the emergency loan for up to $15,000 for 2 months of working capital while they workout the overload of loan applications. This $15k is a loan and has nothing to do with the $10k grant that was first spoken of.

If you have already applied the wait for the email about the loan of up to $15k is about 3 weeks now.

If you qualify for the EIDL loan you have 12 months to accept the loan.

*Your SBA loan officer will have more detail in the process and changes as they occur.


Fun Fact:

You can apply and receive both the EIDL & PPP so long as they are both used for separate reasons. Contact us for more information.


 

PPP Paycheck Protection Program


This loan program if used properly can be completely forgiven if used properly. This loan says it is up to $10 million or 2.5 x average total of payroll, whichever is lesser. The PPP covers payroll, for corporations and multi-member LLC's that dollar amount is calculated from the W-3 filed for 2019, tips, sick pay, group health insurance, retirement benefit, state tax on employees, etc. Payroll above $100k per employee is calculated differently, but we can review that together. For sole proprietors and single member LLC's they can include the same as above, but since they are not allowed to be on payroll for the company the net profit up to $100k will be included for the owners pay.

For this loan to be forgiven 75% of the loan must be used for payroll in the 8 weeks after the loan is made


Fun Facts:

  • You can apply and receive both the EIDL & PPP so long as they are both used for separate reasons. Contact us for more information.


  • How do I get the loan forgiven? You must contact your lender for how to have the loan forgiven. They will request documents need for proof of funds being used properly. This is where your bookkeeping will need to be kept up to date.


  • Do I need to keep all my staff members? Your loan forgiveness will be reduced if you decrease your employee headcount. Get with your lender for details.


  • If my loan is not forgiven, when is the loan due? 2 years but you can pay off sooner if needed.


  • What will the interest be on the loan? 1% fixed rate.


  • When is my first payment due? Although interest will continue to accrue, your first payment will be deferred for 6 months.


  • If I take the PPP can I use the payroll tax credit on workers also? No, you can only use one or the other.


 

Paid Sick Leave


As an employer you may be paying for sick leave due to the COVID-19. The Families First Coronavirus Response Act focuses on businesses with 50-500 employees.


The sick time pay is calculated by the reason the employee is out. For more information on this visit The Department of Labor or contact us for a consult.


 

Unemployment


What are some of the reasons I can apply for unemployment right now? Many people are finding themselves unemployed for so many reasons right now.

  1. Laid off at their workplace

  2. Less hours or pay due to lack of work

  3. The business they owned had to close due to the COVID-19


What is the Pandemic Unemployment? This extends benefits to those that may not have qualified for unemployment insurance before this pandemic such as, self-employed, independent contractors, those without enough work history.


Wait what about this $600 I keep hearing about? Through the CARES Act the state will be providing an unemployment compensation boost of $600 from federal https://www.dol.gov/newsroom/releases/eta/eta20200404


I am out on disability or FMLA, when I return my work will still be closed due to the Corona Virus. Can I apply for unemployment? YYes once your disability is over you and your place of employment is still closed or has lack of work due to the COVID-19 you can still apply for unemployment.


Want more information about the Pandemic Unemployment in your state?


 

Economic Impact Payments


Fun Facts:

How much will the Economic Impact Payments be?

  • Single filers that made $75,000 or less will get the full $1,200 each. If you made more than $75,000 but less than $99,000 you will still get a payment, it just won't be as much.

  • Head of Household that made $112,500 or less will get the full $1,200. If you made more than $112,500 but less than $136,500 you will still get a payment, it just won't be as much.

  • Married that made $150,000 or less will get the full $2,400. If you made more than $150,000 but less than $198,000 you will still get a payment, it just won't be as much.


I haven't filed my 2018 or 2019 taxes, can I still get my economic impact payment? You must have filed your 2018 or 2019 taxes. If you have not done this yet please contact our office ASAP and an enrolled agent can get this done for you. If you are not required to file please see below for non-filers.


I also have a child will I get more for my child? Yes you will receive an additional $500 per child.


I was claimed as a dependent, will I still received a payment? No, dependents will not receive Economic Impact Payments


How can I give the IRS my updated bank information?

Non-filers - those not required to file for 2018 or 2019 income taxes can enter their payment info here. (Please always make sure your are on an actual government site.)
Filers - to view the status of your payment or to update your direct deposit information click here. Please be advised at the time of writing this, the link is inactive. The IRS expects it to be active mid-April.

I moved! Now what? When you move your should file a form 8822 to inform the IRS you have a change of address. If this has not yet been done get it done asap! Our office offers this service also.


I owe child support; will I still get a payment? No, if you owe child support the payment will not be distributed to you.


If I don't get my payment now, will I miss out? No, this rebate will be on your 2020 tax return. If you received it, it will be a wash and you will not get another credit on your 2020 tax return. If you did not receive it you will see a line item on your return to account for this and it will credit your refund or the amount you owe.


So if I made more than the thresholds in 2018 or 2019, but less than the threshold in 2020 will I still get a Economic Impact Payment? Yes, but you will not receive it until you file your 2020 tax return.


What if I receive the Economic Impact Payments because I made under the threshold for 2019 but over the threshold for 2020? The payment you get now is an advance payment. If you make more in 2020 and should not have received the payment, you will simply owe the IRS back the money. The IRS will not penalize you for receiving the payment though.


I'm on social security, do I still get an Economic Impact Payment? Yes! If you need to update your address or direct deposit information, please contact us and we can assist you with this.


The IRS site shows I was paid already but I haven't received anything in my bank account? Within 15 days after payment is made, you will receive a letter in the mail stating you received your payment. This letter will also let you know what to do if you have not received the monies.


 

Federal Student Loan Payments


Forbearance to September 30, 2020


Check out Bank Rate's article "If you have a student loan, here’s what happens when the Fed lowers rates"

 

Paid Sick Leave


Unemployment - For example Business Owners, Self-Employed Individuals and Independent Contractors in CA - https://www.edd.ca.gov/about_edd/coronavirus-2019/pandemic-unemployment-assistance.htm



 

Utility Payments


While there is no forbearance on utility payments, some states have waived late fees, suspended disconnection notices or setting up payment plans.



 

Income Tax Returns


Individuals (form 1040) due 7/15/2020 with an extension due 10/15/2020

Partnerships (form 1065) were due 3/16/2020 with an extension due 9/15/2020

C-Corporation (form 1120) due 7/15/2020 with an extension due 10/15/2020

S-Corporation (form 1120S) were due 3/16/2020 with an extension due 9/15/2020


 

State COVID-19 Assistance




 

Beaubien Business Services, Inc. is not a law firm and does not give legal information.

For business consulting or tax consulting please contact us at info@beaubienbookkeeping.com

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