VRA Stimulus Guide for Individuals and Small Businesses.
/Hi everyone, Tyler here. As you’ve heard Kip and I talking about on our podcasts, we wanted to put together a simplified document that provides links and info to the CARES Act. I hope this helps in this time of uncertainty, and while we cannot give individual financial advice, we are always here for your questions. Another great resource is Gene Marks on twitter. Gene is answering all questions sent his way, and you can find him here, https://twitter.com/genemarks.
Under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), signed into law last Friday, individuals and businesses now have access to extensive aid, grants, and other economic incentives from this $2 Trillion dollar bill. In this piece I will walk you through how both individuals and business owners can take advantage of this economic relief package. Here we go...
Stimulus check for individuals who qualify
U.S. citizens who made less than $75,000 in 2018 and 2019 will receive a $1,200 stimulus check in early April. For those who earned more than $75,000, the rebate check will shrink by $5 for every $100 earned more than $75,000.
For couples who joint-file, the reduction starts once they earn more than $150,000. For heads of household, this number begins at $112,500. Individuals who earned more than $99,000 and couples who earned more than $198,000 jointly will not qualify.
Here is a calculator to see if you qualify
https://www.kiplinger.com/tool/taxes/T023-S001-stimulus-check-calculator-2020/index.php
Claiming a dependent
If you made less than $75,000 as an individual or $150,000 as a household and claim a dependent, you will receive an extra $500 per child under the age of 17.
However, people who are claimed as a dependent, even if they filed a tax return under $75,000, will not be eligible for a $1,200 check.
Unemployment and how individuals can apply
Unemployment insurance has been extended to include bigger unemployment checks and also expanded for multiple groups previously ineligible for unemployment assistance including, gig-works and freelancers, self-employed workers, people seeking part-time work, workers who can’t reach their place of work, and those who don’t have sufficient work history to previously qualify
Importantly, this bill also now allows workers who have quit their job as a "direct result of Covid-19” to qualify for unemployment, this situation would not normally qualify.
Unemployment insurance will also be provided to those laid off by their employer, furloughed workers, and employees working reduced hours due to Covid-19. If you receive workers’ compensation you will also qualify for a check.
You can apply online depending on your state, here is a helpful resource to see how this applies to your state.
https://www.careeronestop.org/WorkerReEmployment/UnemploymentBenefits/how-do-i-apply.aspx
What if I am retired?
Retirees, who claim social security, or those who claim disability benefits are also included in the bill.
Any taxpayer is eligible. Recipients must have a social security number and cannot be dependents. The checks will be based on 2018 returns, or 2019 returns if they have already been filed. The amount will be based on all income including social security and other benefits such as supplemental security income. If you did not file taxes the government can use a beneficiary’s social security statements.
"According to the law, people who do not receive Social Security benefits and also do not typically file taxes because their income is very low will need to file a 2019 tax return in order to receive a stimulus check.”
If you are in this bracket, you can file your tax returns for free through the site below.
https://www.irs.gov/filing/free-file-do-your-federal-taxes-for-free
Student Loan Payments
All federal loan student payments will be suspended through September 30th, 2020. This means anyone with a federal student loan will have the option of pausing their federal student loans without any penalties or late fees. This does not include private student loans or FFEL Loans.
During this time no interest will accrue on federal student loans. For this period interest rates will be set to 0%. If you do decide to continue to pay your loan, your payment, unfortunately, will not be lower, but no new interest will be accrued.
Pausing your payment will not negatively impact your payments for student loan forgiveness.
https://www.forbes.com/sites/zackfriedman/2020/03/28/student-loans-payments-suspended/#58411cc91b10
Economic relief for Small Business Owners
Important, do not lay your people off, these loans may be forgiven if borrowers maintain their payrolls during the crisis or restore their payrolls afterward.
A variety of businesses are now eligible to participate in what is called the “Paycheck protection loan program”. This includes sole proprietors, independent contractors, self-employed individuals and more, so long as the business employees less than 500 people.
Paycheck Protection Program
If employers maintain payroll, the program will provide cash-flow assistance through 100% federally guaranteed loans.
Forgiveness of up to 8 weeks of payroll
No SBA fees
Six months of deferral with max up to a year
Small businesses and other eligible entities will be able to apply if they were harmed by COVID-19 between February 15, 2020, and June 30, 2020.
This program would be retroactive to February 15, 2020, in order to help bring workers who may have already been laid off back onto payrolls.
The maximum loan amount for eligible businesses will be the lesser of these following sums
Average total monthly payments for payroll costs incurred by the applicant during the 12 weeks beginning Feb.15, 2019 or March 1, 2019, multiplied by 2.5
Or, $10,000,000
Important: The amount borrowed is subject to repayment if the borrower reduces employees or decreases wages.
The SBA website now has a simplified EIDL application process which can be found at the link below
Small businesses can also receive investment capital from SBICs
Small Business Debt Relief Program
This program will provide immediate relief to small businesses with non-disaster SBA loans, in particular 7(a), 504, and microloans. Under it, SBA will cover all loan payments on these SBA loans, including principal, interest, and fees, for six months
Do you qualify?
Microloans
Economic Injury Disaster Loans & Emergency Economic Injury Grants
These grants provide an emergency advance of up to $10,000 to small businesses and private non-profits harmed by COVID-19 within three days of applying for an SBA Economic Injury Disaster Loan (EIDL). The advance does not need to be repaid under any circumstance.
Small business guide and check list for emergency loans
https://www.uschamber.com/sites/default/files/023595_comm_corona_virus_smallbiz_loan_final.pdf
While we cannot give individual financial advice, we can recommend you go to SCORE.org, a free mentoring and education service for start-ups and existing businesses.
SCORE is a non-profit resource partner of the U.S. Small Business Administration that provides free, confidential business advice through their network of volunteer business experts. They have over 10,000 dedicated volunteers, and because they receive government funding most of their services are offered at no cost.
At the website below you can access SCORE’s services including their remote mentoring sessions where you are assigned a mentor for free, personalized assistance to address the current crisis and help you business. They also have free online webinars and workshops to help you find the correct financial support for your business.
SCORE: https://www.score.org/coronavirus
Full relief document for Small Businesses
This bill covers a wide variety of scenarios. Our goal is to help make this as easy on you as possible, so that you may get the assistance that you deserve.
If you have any questions please let us know and we will be happy to help where we can.
Tyler Herriage
Since 2014 the VRA Portfolio has net profits of more than 2300% and we have beaten the S&P 500 in 15/17 years.
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