Most Recent Relief Program Q&A and Corrections

[Newsletter sent to Thrive  clients 4/20/2020]

 

There are many updates on both state and federal relief programs – more than I can include in any newsletter.  Below I cover information that relates to the most common questions we are receiving and information that is new and/or different from what was previously released (and therefore is a correction to prior information provided).

If you are a current client and unable to find the answer you need using the resources below (& in prior newsletters), please email admin@thrivebusinessgroup.com and we will do our best to answer your questions.

Thank you,

Siobhan

 

Unemployment claims for self-employed

Washington state has opened for unemployment claims for self-employed individuals under the Pandemic Unemployment Assistance (PUA) program. Unfortunately, we have no additional information beyond what is published on the ESD website. As a result, we are unable to answer detailed questions about if you qualify, how much you qualify for, when you will receive benefits, etc.

All information about the PUA program and the application process is available online here:  https://www.esd.wa.gov/unemployment/self-employed

 

SBA Loan programs (EIDL / PPP)

The SBA has been so overwhelmed by applications to these programs that the SBA has shut down all new applications.  Although congress is in negotiations for additional funding & additional Covid-19 relief, as of writing this newsletter, no new laws have been passed.

PPP Loan:  If you have questions on this loan, please contact your business banking lender. They are in the best position to answer your detailed questions.

EIDL Loan / Grant: This program had $10 Billion in funding.  The SBA received over 4 million applicants requesting $400 Billion in funding. Only about 24,000 of those applications have been processed. This gives you an idea of the degree to which these relief programs are overwhelmed and underfunded. As a result, even if more funding is approved, I would be surprised if this program is re-opened for applications.

When this program was first released, it included a forgivable advance of $10,000 (acting like a grant). The SBA has now announced that this advance will be limited to $1,000 per employee up to $10,000 maximum.  They have not specified how this will apply to self-employed individuals or rental property owners.

My best guess is that self-employed individuals will count as 1 employee and receive $1,000 and that rental property owners will receive nothing. But that’s just a guess, the SBA will make their own determination of how to implement their decision.

Please note, if you were one of the first applicants to the EIDL program, your application number will start with a “2” and your application will not be processed and you must resubmit your application if the SBA re-opens their application system.

Here’s why: when the EIDL program was first released, it included a $10,000 forgivable advance for all applicants.  Then, the SBA was overwhelmed with applicants so they decided that they would only issue advances of $1,000 per employee up to $10,000.  However, their application form did not ask how many employees the applicant had.

They updated their system to ask for the number of employees and then started issuing application numbers with a “3” at the beginning.  All prior applications started with a “2” and will not be processed.  The SBA has indicated that these applicants will need to re-apply (if/when their system is reopened).

You can monitor the EIDL application system here: https://www.sba.gov/funding-programs/loans/coronavirus-relief-options/economic-injury-disaster-loan-emergency-advance

 

Stimulus payments

The IRS has two tools available to assist you with stimulus payment issues, both located here: https://www.irs.gov/coronavirus/economic-impact-payments

If you want to check on your payment status, confirm if it’s direct deposit or check, or provide direct deposit info (in some cases), you can do so using the “get your payment” tool.

If you have not been required to file a tax return in the last two years, you can provide the IRS your info to receive your payment using the “non-filers” tool.

A few other updates recently published by the IRS:

In a previous newsletter, I explained that the stimulus payment is an advanced payment of a new tax credit on the 2020 tax return.  In the past, advanced payments of credits have been subject to a reconciliation – any extra received is repaid and any underpayments are added as a refund.

However, the IRS has now stated that they are treating this advanced credit payment differently. They will not require any repayment but they will allow claims of additional credit if applicable (for example if a child is born in 2020).

If the IRS has your bank account info on file from a previous direct deposit of a refund or for direct deposit of federal benefits (such as social security income), then they will use that bank account for your payment.  (This is the same as previously reported.)

However, if they have your bank account info from you making a direct debit payment for your tax return, they will not use that bank info.  Instead, they will mail a check, or you can use the “get your payment” tool to provide your bank info.

 

Estimated Tax Payments

The IRS updated the due date for the Quarter 2 estimated tax payment to 7/15/2020.  As a result, 2019 tax return payments, Quarter 1 and Quarter 2 estimated tax payments are all due on 7/15/2020.

 

SBDC resource website

The Small Business Development Center (SBDC) is keeping a great list of relief programs with ongoing updates.  I encourage you to monitor their resource page for additional programs and information: https://sbdc.wwu.edu/business-continuity-resources

 

Safe workplace guidelines

If your workplace is open as an essential business – or if you want to start preparing for re-opening as the Governor allows, L&I has issued the following information to assist you in ensure a safe workplace for you and your workers: https://lni.wa.gov/forms-publications/F414-164-000.pdf

 

Confirmation of your tax filing

We file your tax return after receiving your signature on the e-file authorization form. After submitting your return, we get an acknowledgment back from the IRS that your return was received.  We make this acknowledgement available to you in your secure client portal – we upload it about a week after you sign for your e-filing.   The document name will be “IRS Efile ACK 2019 [client name]”.