Tax Information on Coronavirus (COVID-19) Stimulus Packages
We hope that all is well with you and yours. Over the past couple of weeks, additional guidance has been issued on the three separate stimulus packages that impact everyone – individuals, businesses, gig / self-employed and retirees. We tried to compile a summary of these tax laws below.
New guidance for the CARE ACT is coming out hourly. The IRS launched an app, Get My Payment for you to check on the status of your Stimulus Payment.
Individual / Sole Proprietor / Self-Employed / Freelancer / Gig Worker
- Are you hurting financially due to COVID-19?
- You may be eligible for Unemployment Benefits (even if self-employed)
- Economic Impact Payments / Stimulus Payments
- Tax Filing Deadlines
- No Retirement Minimum Distributions (RMD) in 2020
The SBA stopped accepting new EIDL and PPP Loans. Word on the street is that Congress is working on a new stimulus package to reopen these programs. If your business missed Round 1, are you prepared to immediately submit your EIDL / PPP application for Round 2?
New SBA loans are a game-changer. Very low interest rates, no collateral, minimal credit checks
- Emergency Paid Sick Leave Act
- Emergency Family and Medical Leave Expansion Act
- Paycheck Protection Program (PPP)
- Economic Injury Disaster Loan (EIDL)
- Employee Retention Credit
Are you a Small Business Owner, run a Nonprofit, or Are a Gig / Self-Employed / Independent Contractor? YES – You Owe it to Yourself to Keep on Reading…
The new SBA loans are a game-changer. Most of these loans have very low-interest rates, no-prepayment penalties, no loan fees, long terms and may be forgivable. These loans are much cheaper than paying for your business expenses with credit cards, home equity lines of credit, and even that precious cash sitting in your bank account. The SBA is opening up the second rounds of applications on Monday, April 27, 2020, at 10:30 AM EST.
- Interest rates cap at 4%. This SBA loan beats any other debt that you may build up over the next few months. If you have credit card debt, you may want to consider consolidating your debt into these low-interest SBA loans.
- No collateral. These loans are 100% backed by the SBA and some of them require no collateral. There are minimal credit checks, so, if you've previously been turned down for a loan, you most likely will still be eligible for these SBA loans.
- Some loans are forgiven by the SBA. If the loans are used to pay specific expenses, the SBA may forgive most or all portions of your loan. This means you get to Pass GO and Keep the Money. If you spend most of the SBA loan on maintaining payroll, including you, then you may not have to pay a significant portion of your loan back so the SBA. Plus you don’t have to declare the forgiven piece of the SBA loan for your 2020 taxes!
We are offering FREE webinars to assist you in understanding the required information that you need to prepare your application. If necessary, we are also pleased to assist you in preparing these documents for you.
DISCLAIMER: This information is not intended to apply or give advice for your specific situation. This information has been updated as of Tuesday,, April 21, 2020. We are an independent CPA firm and are not loan officers, lenders or an employee of the government or state. This summary represents our interpretation of the multiple stimulus packages and the CARES Act and, as such, does not constitute legal advice and is not intended to apply or give advice for your specific situation.
Also, please note that the government is constantly releasing additional information and hence the information in this document may change. (As in, if I could predict the future, I would be self-quarantined on a beach somewhere sipping pina coladas.)
Still confused about some aspect of the CARES Act? Register for one of our free upcoming webinars:
- Prepare for Payroll Protection Program Loan - Tues, April 21, 9AM EST
- Prepare for Payroll Protection Program Loan - Thurs, April 23, 6PM EST
- Individual Provisions of CARE Act - Tues, April 21, 6PM EST
- Individual Provisions of CARE Act - Thurs, April 23, 9AM EST
- Questions? Please call us at (781) 883-3174 or email us at [email protected] PLEASE STAY SAFE!