I think it’s fair to say we were all disappointed that the loans in the first round of the multi-billion dollar Paycheck Protection Program didn't last longer. But I have to add it was surprising how quickly the next round was rolled out! Whether or not you're a recipient of a stimulus loan, there are other provisions and resources designed to help us in these uncertain economic times.
The Coronavirus stimulus pushed the federal income tax deadline to July 15, sent non-taxable Economic Impact Payments to most Americans and expanded the Family Medical Leave Act to ensure family and medical leave for specified COVID-19 related reasons, even to the self-employed. The act expanded unemployment insurance for many, extending it to the self-employed, independent contractors, gig workers, freelancers and people who have been furloughed. It also raised the unemployment benefit amount and extended the benefit period (details differ depending on your state). Homeowners with federally-backed mortgages who have lost their jobs can request federally backed mortgage forbearance for up to 180 days and some big-banks have their own programs – ask your banker. Automatic suspension of interest and payments for federal student loans is also part of the package.
IRS Coronavirus Relief: Although it’s counterintuitive to see “IRS” and “Relief” in the same phrase, there are surprisingly good provisions here to help families and individuals, as well as businesses and tax-exempt entities. The IRS is actually suspending current installment plans without default and will not start new automatic liens and levies or collection activities until July 15. On the site is an explanation of the new provisions, and a place for qualified non-filers (haven’t filed a tax return in 2018 or 2019) to enter payment information and get a stimulus check.
You are allowed to pause your required retirement distributions due to the stock market downturn or you may take penalty-free early retirement distributions due to changes in retirement account rules within the code.
Among the tax revisions is one that allows an employer whose business has been affected by the Coronavirus to take an Advance Payment of Employer Credits. If the employer’s quarterly employment tax deposits are not sufficient to cover the qualified sick and family wages mandated by the Families First Coronavirus Response Act, the employer may immediately take advantage of the credit by reducing the required deposits of withheld employee payroll taxes by the amount of the credit. EXCEPTIONS are businesses that take small business loans and state and local governments and their instrumentalities.
The Employer Payroll Tax Deferral allows certain employers to defer a portion of payroll taxes due in 2020 and pay half in 2021 and the other half in 2022. This provision does not apply to 2019 taxes now due in July of 2020 and does not apply once you have been notified of forgiveness of a PPP loan.
In addition to the CARES Act loans, the SBA offers resources like the programs below, including a 30-minute course in Financing Options for Small Businesses:
And find out about your individual state's relief programs here: Coronavirus Relief by State.
The provisions in the Coronavirus bill are not perfect. The loan programs got off to a very rocky start, unemployment systems across the country have been overwhelmed, relief money is not enough and is not coming quick enough, and there are many of us who just plain feel left out of the “rescue.”
If you are hurting, it’s not a bad idea to consider some things you might not consider in more reasonable times. If you or your family are hungry, take advantage of the many expanded food banks and student lunch programs. Consider applying for the SNAP program - you may now be eligible when you weren’t before. If you can’t pay your bills, reach out for help – from your creditors, from your extended family, from your friends or your church. Take advantage of the newly amended payment plans and interest deferrals offered by your auto lender, credit card provider and utilities companies. Consider applying for unemployment.
On the other hand, if you are not one of the ones suffering, try to make sure others have what they need. Can you add groceries to your order for a neighbor? Does your isolated elderly relative have internet service so he/she can order needed items, use Facetime to talk to relatives or get the information necessary to keep informed? With the extra time you have on your hands, can you help stock a food pantry? The phrase “we’ll get through this together” just can’t be said enough. I believe it’s true.
The Coronavirus curve in America is flattening but the experts are telling us it’s not over yet. Hang in there. Try to stay positive. And reach out to others – albeit a virtual reach.
Other Coronavirus resources:
At SCORE.org, the site of a national network of volunteer business mentors, you can find a mentor free of charge, as well as access excellent free educational resources. The Coronavirus Small Business Resource Hub includes links to grant programs and other funding sources currently offered for small businesses.