Update on Economic Injury Disaster Loan Advance
I received several emails from clients this morning asking for clarification on an email sent from the Small Business Administration. The subject was "Update on Economic Injury Disaster Loan Advance."
I received the same email (see below) and have read through to see what the "update" is telling us. The announcement is that we finally have some details regarding the "advance" that has been promised from the EIDL. (Economic Injury Disaster Loan.)
Remember, we have been hearing about the "up to $10k" advance? The email states that this is determined by calculating $1000 per employee. These employees must have been on the payroll by January 31, 2020.
Note, the EIDL is a different loan from the PPP, which most of you have applied for. The SBA email discusses the differences between the two:
On March 29, 2020, following the passage of the CARES Act, the SBA provided small business owners and non-profits impacted by COVID-19 with the opportunity to obtain up to a $10,000 Advance on their Economic Injury Disaster Loan (EIDL). The Advance is available as part of the full EIDL application and will be transferred into the account you provide shortly after your application is submitted. To ensure that the greatest number of applicants can receive assistance during this challenging time, the amount of your Advance will be determined by the number of your pre-disaster (i.e., as of January 31, 2020) employees. The Advance will provide $1,000 per employee up to a maximum of $10,000.
You may be eligible for another loan program, the Paycheck Protection Program, which is available through participating lenders.
To locate a Paycheck Protection Program Lender, please visit: www.SBA.gov/PaycheckProtection.
Information on available resources may be found at www.sba.gov/coronavirus. For more information on these services, please go to www.sba.gov/local-assistance to locate the email address and phone number for the nearest SBA district office and/or SBA's resource partners. On a separate but important topic, Steven Mnuchin, the US Secretary of the Treasury, announced some updates yesterday regarding the Economic Impact Payments (EIP) and when you should see the funds. While this topic is not part of your business or non-profit, it is another way cash will be coming to the majority of taxpayers. Mnuchin said that most individuals who have their tax returns refunded via direct deposits should have the funds in the bank by tomorrow (Wednesday, April 15, 2020) I suggest you check your personal bank accounts today and tomorrow morning. If the funds are not there, or you usually have checks mailed to you, or you typically have to PAY taxes, you may want to sign up for direct deposit versus waiting for a check to be sent (which could take months) Instructions are on the IRS website. (Some of you may have already received your funds) For details regarding the EIP, I pulled the following information from the IRS website:
U.S. residents will receive the Economic Impact Payment of $1,200 for individual or head of household filers, and $2,400 for married filing jointly if they are not a dependent of another taxpayer and have a work eligible Social Security number with adjusted gross income up to:
$75,000 for individuals
$112,500 for head of household filers and
$150,000 for married couples filing joint returns
Taxpayers will receive a reduced payment if their AGI is between:
$75,000 and $99,000 if their filing status was single or married filing separately
112,500 and $136,500 for head of household
$150,000 and $198,000 if their filing status was married filing jointly
The amount of the reduced payment will be based upon the taxpayers specific adjusted gross income.
Eligible retirees and recipients of Social Security, Railroad Retirement, disability or veterans' benefits as well as taxpayers who do not make enough money to normally have to file a tax return will receive a payment. This also includes those who have no income, as well as those whose income comes entirely from certain benefit programs, such as Supplemental Security Income benefits.
Retirees who receive either Social Security retirement or Railroad Retirement benefits will also receive payments automatically. As always, please keep me posted on your status receiving PPP or EIDL funds so that we can properly account for the income and expenses.
A lot of information was provided in today's eblast. I hope it was helpful!