Forgiveness for the Paycheck Protection Program Loan

Forgiveness for the Paycheck Protection Program Loan (PPP Loan) now has an application with detailed instructions. The SBA and the Department of the Treasury have come together to release a form with detailed instructions and an application for forgiveness. Please note that the application and instructions will be subject to further regulation and guidance.

Please see the link below to access the pdf.


APPLICATION AND INSTRUCTIONS FOR PPP LOAN FORGIVENESS

The SBA has stated the following in their press release:

The form and instructions inform borrowers how to apply for forgiveness of their PPP loans, consistent with the Coronavirus Aid, Relief, and Economic Security Act (CARES Act).  SBA will also soon issue regulations and guidance to further assist borrowers as they complete their applications, and to provide lenders with guidance on their responsibilities.

The form and instructions include several measures to reduce compliance burdens and simplify the process for borrowers, including:

•                Options for borrowers to calculate payroll costs using an “alternative payroll covered period” that aligns with borrowers’ regular payroll cycles

•                Flexibility to include eligible payroll and non-payroll expenses paid or incurred during the eight-week period after receiving their PPP loan

•                Step-by-step instructions on how to perform the calculations required by the CARES Act to confirm eligibility for loan forgiveness

•                Borrower-friendly implementation of statutory exemptions from loan forgiveness reduction based on rehiring by June 30

•                Addition of a new exemption from the loan forgiveness reduction for borrowers who have made a good-faith, written offer to rehire workers that was declined

The PPP was created by the CARES Act to provide forgivable loans to eligible small businesses to keep American workers on the payroll during the COVID-19 pandemic.  The documents released today will help small businesses seek forgiveness at the conclusion of the eight week covered period, which begins with the disbursement of their loans.


APPLICATION

Sources:

https://www.sba.gov/about-sba/sba-newsroom/press-releases-media-advisories/sba-and-treasury-release-paycheck-protection-program-loan-forgiveness-application

https://www.sba.gov/sites/default/files/2020-05/3245-0407%20SBA%20Form%203508%20PPP%20Forgiveness%20Application.pdf

CARES ACT – Highlights for Individuals

The Coronavirus Aid, Relief, and Economic Security Act (CARES Act, H.R. 748) was signed into law on Friday, March 27th, 2020. The act is meant to provide economic relief nationwide with a $2 trillion stimulus package. Titles I, II, III, and IV of the Act  (Keeping American Workers Paid and Employed Act,; Assistance for American Workers, Families, and Businesses, Supporting America’s Health Care System in the Fight Against the Coronavirus (schedule C – Labor Provisions), Economic Stabilization and Assistance to the Severely Distressed Sectors of the United States Economy, respectively) pertain to the economic welfare of the taxpayer. Provisions have been made for individuals and businesses alike.

Individuals

Section 2201

Filing status will have an impact on the amount of the one-time tax rebate an individual will receive. This will be based on the gross adjusted income on your last filed tax return (be it 2019 or 2018).

If you file as individual, expect $1,200.

If you file as joint filer, expect $2,400.

There is a $500 per child credit under 17 to be included. There are limitations however. For every $100 of income over the amounts below, $5 is phased out of the rebate:

Filing as Single $75,000

Filing as Head of Household $112, 500

Filing as Joint Filers $150,000

Thus, there is a cap on receiving this rebate – single filers over $99,000, head of household over $136,500, and joint filers over $198,000 will be phased out completely (this is without child tax credits).

In order to receive this rebate, you

  • cannot be a non-resident alien
  • cannot be a trust or estate
  • cannot be able to be claimed as a dependent on someone else’s tax return
  • Cannot be an ITIN holder.

 The taxpayer MUST have a valid social security number for themselves and any child they are claiming. ITIN holders are ineligible.

How are individuals receiving this money? The disbursements will be made electronically “to any account to which the payee authorized, on or after January 1, 2018, the delivery of a refund of taxes under this title or of a federal payment” (B, Delivery of Payments).

The IRS Economic Impact Payments website provides further details, including:

  • Signing up for Direct Deposit
  • Tracking your Money
  • FAQs and more…
VISIT THEIR PAGE

Retirement Plans

Section 2202

Early withdrawals of up to $100,000 from certain retirement plans will have the 10% penalty waived. The waiver will apply to “Coronavirus-related distributions” under the following:

  • Distributions will be made if the person or spouse is diagnosed with COVID-19, in accordance with a CDC approved test
  • The individual has suffered financially due to the outbreak — being laid off, business closed, quarantine, or any reduction in workable hours

Any Coronavirus-related distributions (“income”) will be subject to tax over a span of three years, if the funds are not paid back within the three-year span upon receiving them. That is, if you cannot repay the amount within the three years of the date one receives the distribution, you can pay the income tax on the amounts, ratably over the same span of three years [1] [2] [3]

Additional sources for this posting were provided by:

https://www.congress.gov/bill/116th-congress/house-bill/748/text

https://assets.bwbx.io/documents/users/iqjWHBFdfxIU/rSVHQuPeCB_g/v0

https://www.npr.org/2020/03/26/821457551/whats-inside-the-senate-s-2-trillion-coronavirus-aid-package

https://www.forbes.com/sites/leonlabrecque/2020/03/29/the-cares-act-has-passed-here-are-the-highlights/#5c2beaa368cd

https://www.natlawreview.com/article/individual-tax-benefits-coronavirus-aid-relief-and-economic-security-act-cares-acthttps://www.natlawreview.com/article/business-tax-benefits-coronavirus-aid-relief-and-economic-security-act-cares-act


[1] https://www.bloomberg.com/news/articles/2020-03-27/coronavirus-bill-lets-struggling-americans-tap-retirement-money

[2] https://www.kramerlevin.com/en/perspectives-search/covid-19-update-retirement-relief-in-the-CARES-Act.html

[3] https://www.fidelity.com/learning-center/personal-finance/coronavirus-stimulus-package

Where is My Economic Impact Payment and Other Frequently Asked Questions

If you have been wondering when your Economic Impact Payment is arriving, you are not alone! The IRS has been sending payments through direct deposit over the last few weeks, while distribution of checks will begin this week.

Where Can I Check My Payment Status or Add Bank Information?

 On the IRS Economic Impact Payments web page!

Click on the “Get My Payment” button to:

  • Check your payment status
  • Confirm payment type (direct deposit or check via mail)
  • Enter bank information for direct deposit (if the direct deposit information was not previously listed and the check has yet to be sent)

The IRS will be using whichever direct deposit information is available on your last filed tax return (2018 or 2019). According to the IRS, updates to payment information are allowed if you did not enter a direct deposit account information previously, and they have not sent payment yet.

  • If you filed in 2019, you cannot change the payment information you listed.
  • If you last filed in 2018 and need to change the account or address, electronically filing your 2019 taxes will be the only way to update the information. 

If the “Get My Payment” tool indicates that a payment is pending or in process, you cannot change the bank account information.

If you are tracking your payment, you will need your Social Security Number, Date of Birth, and Mailing Address (used on Tax Return).

If you want to add bank information, in addition to the information above (SSN, DOB, and Mailing Address) you will need the Adjusted Gross Income on either your 2019 or 2018 tax return, refund or amount due from latest filed return, and bank information (type of account, routing number, and account number).

Are you a non-filer?

If you do not file taxes because your gross income was under $12,000 (including people with no income and couples filing jointly  under $24,000) or because you weren’t required to file 2018 or 2019 for other reasons, you can still enter your direct deposit information by clicking on the “Non-Filers: Enter Payment Info Here” button. You have until Wednesday, April 22, 2020 to add any child dependents.

How Often Will My Payment Status Change?

Updates to the payment status are made once a day.

Why Does It Say “Payment Status Not Available”?

A number of reasons could be causing this, including but not limited to:

  • If you filed your 2019 tax return, but the IRS has yet to process it
  • The application (linked above) does not have your data yet; the IRS is continuously working to add more data and expand the number of people who can use it
  • If you don’t usually file and used the “Non-Filers: Enter Payment Info Here” but your entry hasn’t been processed yet.
  • If you don’t usually file because you receive SSA or RRB Form 1099, SSI, or VA benefits, the information hasn’t been loaded onto the IRS’ system yet for these particular non-filers.
  • You’re not eligible.

Am I Eligible?

  • U.S. Residents who are not dependents of another taxpayer and have a work eligible Social Security Number: ELIGIBLE
  • Eligible Retirees and recipients of Social Security, Railroad Retirements, disability benefits as well as taxpayers who do not make enough money to normally file (including those who have no income, or income is solely form benefit programs such as SSI): ELIGIBLE
  • High income filers (adjust gross income greater than $99,000 for single or married filing separately, $136,500 for head of household, $198,000 filing married jointly): INELIGIBLE
  • You can be/are claimed as a dependent on someone else’s return: INELIGIBLE
  • You do not have a Social Security Number (SSN):  INELIGIBLE
  • You are a nonresident alien:  INELIGIBLE
  • You filed Form 1040-NR, Form 1040NR-EZ, Form 1040-PR or Form 1040-SS for 2019:  INELIGIBLE

What If I Have an ITIN?

According to the IRS, “you can access Get My Payment […] but in most cases, the law does not allow an Economic Impact Payment (EIP) for individuals who file a return using an ITIN. The only exception is when two spouses file a joint tax return and either spouse is a member of the U.S. Armed Forces at any time during the taxable year, in which case only one spouse needs to have a valid SSN.”

What if I am a US Citizen Living Abroad?

US Citizens living abroad are eligible. If you are eligible to file Form 1040, Form 1040-SR and have a valid SSN, and can’t be claimed as a dependent of another taxpayer, you are eligible. Nonresident Aliens who file 1040-NR or 1040-NR-EZ are not eligible. 

What If I Am a US Resident Alien?

If you are considered a US Resident Alien for 2020, but not 2019, you can claim the payment when filing Form 1040 or 1040-SR with the IRS for Tax Year 2020. If you are considered a US Resident Alien for 2019 but not 2020, you will not need to repay the payment paid in 2020 based on your Form 1040 or 1040-SR for the Tax Year 2019.

When Am I Getting My Payment?

If your direct deposit has already been entered, you may have received your money already. If you still haven’t and need to add bank information, please see the information above, you may still have time to change how you will receive your money. Please use the “Get My Payment” tool to check on your status.

According to Forbes, the paper checks will start going out this week, ending April 24th. The order of distribution is reportedly in order of lowest annual adjusted gross income. The schedule below provided by Forbes, was first reported by The Washington Post is subject to change by the IRS. This schedule pertains to paper checks. Direct Deposits have already started.

Less than $10,000: April 24
$10,001 – $20,000: May 1
$20,001 – $30,000: May 8
$30,001 – $40,000: May 15
$40,001 – $50,000: May 22
$50,001 – $60,000: May 29
$60,001 – $70,000: June 5
$70,001 – $80,000: June 12
$80,001 – $90,000: June 19
$90,001 – $100,000: June 26
$100,001 – $110,000: July 3
$110,001 – $120,000: July 10
$120,001 – $130,000: July 17
$130,001- $140,000: July 24
$140,001 – $150,000: July 31
$150,001 – $160,000: August 7
$160,001 – $170,000: August 14
$170,001 – $180,000: August 21
$180,001 – $190,000: August 28
$190,001 – $198,000: September 4
Remaining checks: September 11

What If My Bank Account Has Changed/Closed Since I Filed?

  • If the Economic Impact Payment has been scheduled, you cannot change the information
  • If your account has closed, the bank will reject the check, and it will be issued to the address you have on file. If your payment has been processed (when you check “Get My Payment”), you cannot change the bank information.

I Made an Electronic Payment (Direct Debit Installment Agreements included) to the IRS. Will My Payment Be Direct Deposited into This Account?

No. If the IRS does not yet have your direct deposit information (on last filed Tax Return) and your payment hasn’t been processed yet, you can use the “Get My Payment” tool to provide bank information. Otherwise, the payment will be mailed to the address on file for you.

What If I Split My Refund into Different Accounts?

Your payment will be sent to the first account listed on Form 8888. If it is rejected, the payment will be mailed by check.

What If My Address Changed?

  • You have not filed your 2019 taxes yet you will need to enter the new address when filing.
  • If you already filed your 2019 taxes, and you didn’t receive a refund via direct deposit, the payment will be mailed to the address on file for you, which is what is on the most recent return or as updated by the United States Postal Service.

Am I going to receive the entire $1,200 (as an individual or head of household; $2,400 for joint married filers)?

If you file as an individual and make less than $75,000 YES

If you file as a head of household and make less than $112,500 YES

If you file jointly as a married couple and make less than $150,000 YES

Amounts greater than these but with a cap list in the “Eligibility question” will receive reduced payments.  Additionally, there is a $500 credit per qualifying child.

What If I Owe Tax, Have Federal/State Debts, or Have a Payment Agreement with the IRS – Will My Payment Be Reduced?

No, with the exception of past due child support.

Is This Payment Taxable as 2020 Income?

No. This payment is not considered income, you will not need to pay taxes on it, it will not reduce your refund or increase amount owed, and it will not affect income for purposes of eligibility for federal government assistance/programs.

What If a Child Is Born in 2020, Is Adopted, or Placed into Foster Care in 2020?

The payment is based on 2019 or 2018 tax return information. These children will not be considered for additional amounts. You may claim the additional credit in your 2020 tax return.

What If My Child Just Turned 17, and I Already Received the $500 Credit?

If your qualifying child turns 17 in 2020, you will not be required to repay the Payment when you file your 2020 Tax Return or if your Adjusted Gross Income increases in 2020 above the thresholds listed under eligibility.

What If I Claimed an Adult as a Dependent, Do They Get a Payment?

Neither you nor the adult dependent (a parent, for example) will receive the payment. You will not receive an additional payment as this person is not a qualifying child, and the person will not receive a payment as they are a dependent. If you can claim the person as dependent on your tax return in 2020, they will not receive a credit in 2021.

For Additional Tools and Assistance:

Get My Payment Tool

IRS Get Your Economic Impact Payment Tools Guide

Get My Payment FAQs

Economic Impact Payment Center

Sources for all of the information used and quoted in this post:

https://www.forbes.com/sites/zackfriedman/2020/04/21/stimulus-checks-schedule/#6fb14be07b84

https://www.washingtonpost.com/business/2020/04/20/if-youre-one-these-american-taxpayers-you-have-until-noon-wednesday-file-500-per-child-stimulus-check/

https://www.irs.gov/coronavirus/economic-impact-payment-information-center

https://www.irs.gov/coronavirus/get-my-payment-frequently-asked-questions#Accessing

https://www.irs.gov/newsroom/how-to-use-the-tools-on-irsgov-to-get-your-economic-impact-payment

https://www.irs.gov/coronavirus/get-my-payment

Executive Order 202 Extended

On May 7, 2020, New York Governor Cuomo issued an extension on the mortgage and rent moratorium to August 20, 2020. The extension states:

  • A landlord cannot begin any proceedings or enforcements of evictions for non-payment of rent for residential or commercial tenants facing financial hardship due to COVID-19 for a period of sixty days beginning on June 20, 2020.
  • Foreclosures due to non-payment of mortgage by someone facing financial hardship due to the pandemic are also waylaid by sixty days beginning on June 20, 2020.
  • No landlord, lessor, sub-lessor, or grantor shall demand or be entitled to any payment, fee, or charge for late payment of rent occurring during the time period from March 20, 2020 through August 20th, 2020.

The following addition was made:

  • Tenants and licensees of residential properties and their landlords may enter a written agreement (an email confirmation will suffice) to use the direct deposit and any interest towards unpaid rent, if the tenant has been facing financial hardship due to COVID-19. The tenant, however, will have to “replenish” the deposit, “at a rate of 1/12 the amount used as rent per month…[it] shall become due no less than 90 days from the date of usage of the security deposit as rent”. Landlords are not to pressure or harass tenants or licensees into such agreements.

All information and quotes were provided by the following resources:

https://www.governor.ny.gov/sites/governor.ny.gov/files/atoms/files/EO202.28.pdf

https://www.crainsnewyork.com/real-estate/eviction-moratorium-extended-cuomo-also-offers-help-landlords

https://www.amny.com/coronavirus/cuomo-extends-eviction-ban-through-august-helping-cash-strapped-new-york-renters/