COVID-19 Situation Room
We will be adding helpful and strategic resources to help eCommerce, Online, and Small Business Owners win the fight against COVID-19. It’s about taking strategic financial action to protect small businesses, their employees, and families. Our COVID-19 Relief Snapshots below are the best place to get the summaries you need. Please sign up for our COVID-19 Navigation Newsletter above or like us on Facebook so we can help you cut through the COVID noise and stay informed!
2020 U.S. Coronavirus Legislations Enacted
Coronavirus Preparedness and Response Supplemental Appropriations Act (CPRSAA)
Introduced to the House on March 4, 2020 and signed into law March 6, 2020. This bill provides $8.3 billion in emergency funding for federal agencies to respond to the coronavirus outbreak. This is the first of three aid packages delivered to fight COVID-19 with the biggest public benefit to our system by allowing the delivery of telehealth services during an emergency.
Familes First Coronavirus Response Act (FFCRA)
Introduced to the House on March 11, 2020 and signed into law March 18, 2020. This bill responds to the outbreak providing paid sick leave, tax credits, and free COVID-19 testing; expanding food assistance, unemployment, and more. This is the second of three aid packages to help individuals and families alleviate concerns on meeting basic needs with strict employer requirements.
Coronavirus Aid, Relief, and Economic Security Act (CARES Act)
Introduced to the House on January 24, 2019 to serve as a bill for Middle Class Health Benefits Tax Repeal Act of 2019 quickly pivoted to mitigate the economic impact of COVID-19. This is the third of three aid packages signed into law on March 27, 2020 with a $2 trillion dollar price tag with its Keeping American Workers Paid and Employed Act along with Recovery Rebate Checks for Individuals.
COVID-19 Relief Snapshots
“It’s gonna be different, but it’s gonna be ok.” ~ Jessica Mae Stafford, Vision + Branding
These days this is the statement that is keeping us calm and helping us to serve others. There’s reality and hope baked into that one simple statement.
Now more than ever, strategic planning along with thinking up in the down times are the survival skills you must learn fast.
We are in the process of creating a strategic framework for you to thoughtfully assess where you are, who you need in the room with you, what you need to act on, and make leadership decisions despite the big question marks.
We believe the 7 Strategic Steps To Thinking Up In Down Times are:
1. Adopt Strategic Mindset and Care Routines For Owners
2. Document Company and Owner State of The Union
3. Identify Safety and Compliance Requirements
4. Complete an Economic Assessment and Forecast
5. Consider Sales and Marketing Innovations For Today
6. Understand Tax Filing and Payment Requirements
7. Review Economic Aid Options and Decide For Continuity
Keep checking back as we get the practical how-to ready for you. We are all in this together and together we will all get through.
The IRS and Department of Treasury in a joint effort prepared Notice 2020-18 to outline the “Relief for Taxpayers Affected by Ongoing Coronavirus Disease 2019 Pandemic.” This was in response to President Trump’s emergency declaration under the Robert T. Stafford Disaster Relief and Emergency Assistance Act on March 13, 2020.
This Notice 2020-18 confirmed the following:
- Federal Income Tax RETURNS due April 15, 2020 are automatically postponed to July 15, 2020 without filing Forms 4868 or 7004.
- Federal Income Tax PAYMENTS due April 15, 2020 are automatically postponed to July 15, 2020 with NO limitation on the amount postponed.
- Federal Income Tax Payment Relief INCLUDES payments of tax on self-employment income from Taxable Year 2019.
- Federal Income Tax Payment Relief EXTENDS to those Estimated Tax Payments due on April 15, 2020 to July 15, 2020.
- During the period of April 15, 2020 to July 15, 2020 any interest, penalty, or failure to file will be DISREGARDED and will begin to accrue on July 16, 2020.
It is important to note that no guidance or notices have been given related to the Estimated Tax Payments due June 15, 2020. The information only extends to the April 15, 2020 deadlines and payments at this time.
Each state has exercised their own directives about filing and payments. The above is related to FEDERAL only. We recommend reviewing the resource provided by the AICPA on the income tax filing and payment relief options by State HERE. Full disclosure, it’s a big PDF because it has info for ALL the States and is the most comprehensive resource we have seen about the state relief terms.
Your friendly PSA about delaying the FILING of your income tax RETURNS. Honestly, there is no real reason to delay the FILING of your return.
Our team at DigiTax PRO is encouraging all of the clients to stay the course to FILE ON TIME if at all possible. You can extend the payment but still file on time and close down your 2019 so the future can be focused on.
Filing your income tax returns is the official final act to closing your year. Besides, no one really wants to be handling taxes come summer, do they? DO check in with your Tax Pro and if you need a Tax Pro, consider the team at DigiTax PRO!
There is also an extensive IRS Questions and Answers page about Filings and Payments HERE.
In the CARES Act there was a title about Recovery Rebate Checks — you’ve probably heard it circulated on the interwebs and in the media as stimulus checks to taxpayers from the IRS. The IRS calls these checks “Economic Impact Payments”.
Here’s the skinny details on what we know so far:
> On March 30, 2020 the IRS and Department of Treasury announced that distribution of these payments would begin within “the next three weeks”. This means any time between March 31 and April 21, 2020.
> They have indicated that MOST people will not need to do anything in order to receive these Economic Impact Payments.
> It has been shared that SOME seniors and others who typically DO NOT FILE returns will need to submit a simple tax return to receive the payment.
Here’s the skinny on what you could receive:
> Taxpayers who have filed a return for Tax Year 2018 or 2019 will automatically receive payment up to $1200 for Individuals and $2400 for married couples.
> FULL payment for Individuals with an Adjusted Gross Income (AGI) up to $75,000 and $150,000 for married couples. Parents will also receive $500 for each qualifying child.
> When income thresholds exceed the $75k/$150k the amount of the payment will reduce by $5 for every $100 above them. For example, if you’re single and your AGI was $80k it is likely your payment would be approximately $950.
> Individuals who exceed $99k AGI or married couples who exceed $198k AGI with NO children will NOT be eligible for an Economic Impact Payment.
Wondering HOW you’ll receive the payment? Here is how that is shaping up.
- The IRS will use the same banking info reflected on the 2019 return first. If you have not yet filed for 2019, they will use the information on the 2018 filed return.
- If you did not include banking information on the 2019 or 2018 return the IRS is developing a web portal for you to update your banking info to get your payments faster.
- If no banking info is on file, checks will be mailed to the last address listed on the filed return.
When it comes to the updates about anything and everything COVID-19, the updates and clarifications are coming in by the hour on a daily basis. Stay connected to this page or feel free to check out updates straight from the IRS about the Economic Impact Payments HERE.
There are several different types of loan programs within the SBA —- but when the national emergency was declared for the COVID-19 Pandemic and the CARES Act passed, the Economic Injury Disaster Loan (EIDL) was bolstered with a potentially forgivable Loan Advance feature to provide quick economic relief to those businesses who qualify as outlined in Sec 1110 of the CARES Act.
The EIDL is a DIRECT SBA Loan and Emergency Loan Advance. The SBA has streamlined the process to make it a simple process to see what you may qualify for HERE. Before you get to the application we dive into what we know (and think!) that you might want to consider before applying.
THE EIDL PARAMETERS
* The covered period for the Emergency EIDL is for COVID-19 impact between Jan 31 through Dec 31, 2020.
* Eligible entities are those businesses with not more than 500 employees including sole proprietors or independent contractors with or without employees. There are other eligible entities as cited on the loan app.
* Credit Elsewhere terms have been WAIVED meaning there are NO personal guarantees required on advances and loans up to $200k along with the 1-year in business requirement. You simply need to have been in business or self-employed prior to January 31, 2020.
* Approval and ability to repay is based solely on the credit score of the applicant and submission of tax returns will not be required for “small dollar loans”.
* $10 Billion has been appropriated to fund the COVID-19 EIDLs through the SBA. Again, DIRECT through the SBA and not through an approved SBA lender. You cannot receive this consideration through a bank.
* No fees to apply and secure an EIDL. The SBA determines the amount based on their review and the process to consider what you will be awarded could take up to 60 days.
* If a loan offer is extended and accepted, eligibility to defer principal and interest payments for no less than 6 months and no more than 12 months will be available. You are not obligated to accept a loan offer.
* Small business or self-employed EIDL terms are regulated at 3.75% for up to 30 years and for non-profits at 2.75% for up to 30 years.
THE EIDL ADVANCE aka EMERGENCY GRANT
* It has been conveyed that the SBA can provide an EIDL advance when requested by the applicant at the time of application. This advance would be distributed within 3 days AFTER the SBA receives an application.
* There is a box on the EIDL application above that you MUST CHECK to acknowledge you are formally requesting consideration for the advance. Self-certification verfications will be conducted prior to disbursement.
* The amount of the loan advance / emergency grant will be no more than $10,000 and the applicant will NOT be required to repay any amount of the advance, even if the loan is subsequently denied.
* It is purported that this loan advance / emergency grant will not be treated as taxable income to the applicant and receipt of this advance or loan will not preclude the applicant from other sources of funding, i.e. Paycheck Protection Program, etc. Essentially, this up to $10,000 advance will be made available to maintain payroll, self-employed compensation, and/or other existing business operation expenses.
FINAL THOUGHTS ABOUT THE EIDL
* There is no such thing as FREE money. Economic aid from the federal and state agencies comes at a cost. You do not have to apply for the EIDL and if you do, there is no guarantee you will receive a loan offer and there is no requirement to accept a loan if offered. While EIDL terms are extremely favorable we do encourage you to consider all options with caution.
* The up to $10,000 loan advance provision is being positioned as an emergency grant. It might be prudent to complete the application to determine what you and your business or businesses may qualify for. It’s important to navigate those options with understanding.
* There are conditions on how EIDL funds should be used and maintaining EXCELLENT financial documentation around your business spending / revenues will be critical. If you need to beef up those accounting skills or get your financial foundations in place then our ProfitHERO™ Program is for you.
We will be providing more details and updates as we have them regarding the EIDL and/or other SBA Loan programs. Time is of the essence for the EIDL.
It is our understanding that the $10k Loan Advance will only be available for the first one million applicants who qualify as an eligible entity. We are here to help you navigate this landscape so don’t be shy and partner with us inside our ProfitHERO™ Program!
Again, you can apply for the Economic Injury Disaster Loan direct with the SBA here.
There are a lot of changes that has been made to this program since passing through in the CARES Act on March 27, 2020. The process is receiving hour by hour clarifications on HOW to facilitate this vehicle through SBA Lenders and other approved institutions to essentially create a paycheck protection loan with potential forgiveness for small business and self-employed individuals.
It’s a lot to unpack and understand —- DOCUMENTATION to apply and then receive the forgiveness benefit means you must be HIGHLY organized to receive.
We’re gonna let the SBA.gov website do the walking and talking on this benefit because their page will be the most up-to-date information you can get. Our goal is for you to have the OFFICIAL source to rely on.
SBA Paycheck Protection Program is an SBA loan that helps businesses keep their workforce employed during the Coronavirus (COVID-19) crisis.
This resource page shares the summary details on: Loan Information, Who Can Apply, Loan Details and Forgiveness, Other Assistance, along with Lendor Forms and Guidelines. It even includes a Find A Lender feature so that you can review what banks and institutions are working with the SBA for this program.
You MUST work with an SBA-Approved lender or bank to receive funds from this program. This program is NOT being administered by the SBA directly like the Economic Injury Disaster Loan. You do have the ability to participate in BOTH of these economic programs if you qualify and funds are available.
The Small Business Administration (SBA), in consultation with the Department of the Treasury, released a list of Frequently Asked Questions to help give further guidance on how the Paycheck Protection Program should be administered to Small Businesses, Sole Proprietors, and Independent Contractors.
This is another economic aid tool that was enacted by the CARES Act legislation on March 27, 2020. The two main takeaways in this title are:
1. It bumps up the WEEKLY stipend an additional $600 per week for up to 16 weeks of unemployment.
2. It allows for freelancers, independent contractors, and self-employed individuals to participate.
Both points are huge in terms of benefit and opening up the eligibility doors to the lost class of working professionals in the “gig” economy. This is a benefit that you must apply for in the STATE you live in and the hurdles to qualify could prove to be time-consuming and steep.
We were initially excited about this benefit and how it would provide for the self-employed and also help make the W2 unemployed more WHOLE, but it is proving that each State’s Department of Workforce and Labor are scrambling to get the process streamlined.
Don’t be discouraged by a less than ideal process and put it in the option to consider strategically. For reference, we’re going to tie back to the official U.S. Department of Labor for their notice about New Cares Act Guidance On Unemployment Insurance For States In Response to COVID-19.
Our strategic partners over at Gusto.com have an amazing resource that tackles COVID-19 Unemployment Benefits for Every State in the U.S. This resource guide includes quick links to each State’s Department of Labor and Workforce. Again, the Pandemic Unemployment Assistance must be applied for with your State.
Nobody explains this better than our strategic partners at Gusto. Let’s dive into the requirements of this policy for Everything Small Businesses Need To Know About The Families First Coronavirus Response Act.
Yes, it’s true. There’s even COVID-19 Relief for Sales and Use Tax and our strategic partner at TaxValet has done a great job keeping up with all the latest developments for EACH state.
You can access TaxValet’s COVID-19 Resource page about Sales Tax Relief HERE.
DO remember that even though payment extensions are being granted, you will still need to pay the sales tax liability due. We highly recommend making any payments for tax your highest priority to avoid any problems down the road or increased costs due to penalty and interest once the relief period is over.
The team at TaxValet is committed to taking the hassle out of Sales Tax with Done For You solutions along with upcoming DIY resources. You can check out TaxValet’s full website HERE.
“You don’t have to lead your life or business stuck, alone, and out of control. You do have a choice.” ~ Trivinia Barber, Founder of PriorityVA.com
The virtual team at Priority VA have been doing remote work before it was cool or federally mandated. The core tenent at PVA is “Don’t Do It Alone” and there’s no better time than now than to engage with a team of virtual professionals on how to make remote work/life a productive reality.
When the news that a virtual migration was on the rise due to Coronavirus outbreak they quickly took action to create a collection of resources to support Founders, CEOs, Thought Leaders, and Small Business Owners.
It didn’t stop there…. because they specialize in creating virtual teams you can trust they made sure to include resources for the team and their families.
Priority VA is our client, friend, and virtual strategic partner when it comes to making virtual teams work. The experience with them? Radical Service.
Check out their stacked set of FREE resources at www.PriorityVA.com/RemoteSuccess
Put their Founder on your Podcast Speed Dial at www.Trivinia.com.
Small Business Resources
Below are quick links to small business resources we frequent or love!