Tahani and Kamilah own an art studio called Two Birds together, as a partnership. Many states, counties, and municipalities have also put financial assistance programs in place to support small businesses, sole proprietorships, independent contractors, and self-employed individuals. As a sole proprietor, he should claim his eight weeks worth of compensation immediately for the following eight weeks that the PPP covers. Consider this your map to COVID-19 financial relief. The lender will then have 60 days to determine the appropriate level of forgiveness, at which point SBA would purchase and forgive the relevant amount of the initial loan. Learn more about unemployment benefits during COVID-19. If you require legal or professional advice, kindly contact an attorney or other suitable professional advisor. Under PUA, individuals who do not qualify for regular unemployment compensation and are unable to continue working as a result of the coronavirus, such as self-employed workers, independent contractors, and gig workers, are eligible for PUA benefits. These findings include that: Reviews of applications, records, and other data tend to show that there was around $84 billion in potential fraud from the PPP (more than $4 billion) and EIDL (more than $79 billion) government payments; Over 1.3 million EIDL fraud referrals (over 700,000 of which involved identify theft) have been made to the SBAs Inspector Generals Office; Nearly 150,000 hotline complaints related to potential PPP or EIDL fraud have been made to the SBA Inspector Generals Office, an increase of almost 20,000% over previous years; and. Well walk through the different programs, what you need to know about them, frequently asked questions, and well link out to any important resources you should know about. The Association of International Certified Professional Accountants (AICPA) developed a PPP forgiveness calculator that can be found here. If you are an independent contractor or are self-employed and dont have any employees, heres what you need to know about each program: You are eligible to apply for a PPP loan as an independent contractor or self-employed individual who has been or will be harmed by the pandemic if all of the following are true: First, you will need to fill out the PPP application available on the Treasury Department's website (PDF). Share this article. He will not be double-penalised for a wage reduction, because the hourly wage was not changed. As a part of the CARES Act, unemployment benefits have been expanded to include self-employed individuals who may not have otherwise been eligible in the past. The PPP was a loan based on payroll. This will help us process your request faster. Main Street Loan FED: MSNLF Loan, MSPLF Loan, MSELF Loan, EIDL Loans of $200K Go to Vermont, New Hampshire: EXCLUSIVE, Second Stimulus Check Heroes Act 1200 Check, $6000 Per Household. The PPPFA included two new exceptions allowing borrowers to achieve full PPP loan forgiveness even if they dont fully restore their workforce: Incentives to rehire. ST LOUIS (LALATE) - The PUA Grant program going live within days will help those EIDL and PPP applicants who never got a penny from the EIDL and PPP process. Further reading: EIDL vs Paycheck Protection Program: the Breakdown. How to Fill Out Your PPP Forgiveness Application Form, EIDL vs Paycheck Protection Program: the Breakdown, PPP Loans vs Unemployment Benefits: How to Choose, The Express Bridge Loan Pilot Program (A Simple Guide), How to Defer Social Security Tax (COVID-19), Employee Retention Credits: A Simple Guide (COVID-19), Do Not Sell or Share My Personal Information, You were not in operation on or before February 15, 2020, Youre a corporation that does not run payroll (you pay yourself through owner draws), You employ household employees such as nannies or housekeepers (this is not considered a business), An owner of 20% or more is involved in the justice system (incarcerated, on probation or parole) or has been convicted of a felony within the last five years, You, or any business owned or controlled by you or any of your owners, is delinquent or has defaulted on a loan from the SBA or any other Federal agency within the last seven years, You or your business is bankrupt or is currently in bankruptcy proceedings, You are an officer or key employee of the lender you are applying with, or a close relative of one. ST LOUIS (LALATE EXCLUSIVE) As EIDL Loan Denials heat up this month, thousands are asking how to do an EIDL ST LOUIS (LALATE EXCLUSIVE) Are EIDL applicants with Criminal Records denied an EIDL Grant, an EIDL Loan or both? The Coronavirus/Covid-19 pandemic has caused financial strain for many Americans, with more than 46 million U.S. workers filing for unemployment since March 2020, when the pandemic began in earnest. The CARES Act expanded access to loans under the Economic Injury Disaster Loan ("EIDL") program, established an emergency grant to allow an EIDL applicant to request a $10,000 advance on that loan, and provided repayment assistance for certain loan recipients. Darrin Foster and Oogies Deleveraging Through the LMA Intercreditor Distressed Disposal: How Top Five Labor Law Developments for March 2023, Misclassification Concerns in Staffing Relationships. However, there are a few disqualifiers. These three prosecutors will serve at least two-year terms focusing on CAF investigations with the other 45 prosecutors in the MIMF Unit and with Coronavirus Fraud Coordinators and other federal prosecutors around the country. This may be used to pay the payroll, rent, and utilities that allow a small business to keep its doors open. No spam. Attention Los Angeles Retail Businesses: Fair Work Week Ordinance HHS Finalizes Payment Rates and Policies for the 2024 Medicare Courts Weigh Future of Prop. Tom pays himself through owner draws whenever he wants. In this guide, well outline how these three programs work together. Afterinstructing each U.S. Attorneys Office to appoint a Coronavirus Fraud Coordinatorto direct district efforts and to work with other districts and DOJ leadership in dealing with COVID-related fraud, DOJ announced earlier this month that it was creatingthree new prosecutor positions in the Market Integrity and Major Fraud (MIMF) Unitof the Fraud Section to work exclusively on investigations into CARES Act fraud (or CAF) cases. You can apply through FinTech lenders (e.g. loan proceeds must be used only for eligible payroll costs Endnotes. This funding was a grant that was not required to be repaid and was available to small businesses that met the SBA's requirements. You can take advantage of both of these programs at the same time. Further reading: My PPP Loan is the Wrong Amount. Our reasoning: The EIDL must be refinanced if it is being used for payroll purposes. The increased insight into the scope of CARES Act fraud has been followed by an corresponding expansion in federal government resources toward the effort. || TO CONTACT THIS AUTHOR | Email Address: lparesh@lalate.com | Telephone: 314-400-8010 | Follow on Twitter: Twitter.com/LALATENEWS | Biography: http://news.lalate.com/author/lucy-paresh/ | LALATE Staff & Physical Address: http://news.lalate.com/staff/, You must be logged in to post a comment Line 9 of the Schedule A Worksheet of the PPP forgiveness application. As of December 20, a second stimulus package was formed that includes additional funding for the EIDL, PPP, and PUA. While guidance from the SBA is limited, it is assumed that it will work the same as tax filing where you can opt for applying based on your expenses or based on a mileage adjustment. If you are new to operations in 2020, all eligible expenses must have been in place prior to February 15th, 2020. Further reading: PPP Loan Forgiveness: The Complete Guide. Health and safety guidelines for businesses (CDC.gov). Some programs are currently allowing employees with cut hours to continue to collect unemployment benefits for their lost pay. National Law Review, Volume XI, Number 89, Public Services, Infrastructure, Transportation, A Bipartisan Tax Bill Aims to Close Loopholes in Whistleblower Law. How do EIDL and unemployment benefits overlap? included $142 million for Inspector General Offices and other watchdog organizations, instructing each U.S. Attorneys Office to appoint a Coronavirus Fraud Coordinator, three new prosecutor positions in the Market Integrity and Major Fraud (MIMF) Unit. Based on these fraudulent applications, SBA issued more than $1.56 million in EIDL Advances to people who were not eligible. PPP: Paycheck Protection Program5-year low-interest, forgivable loan primarily for payroll. Learn more at the DC LEAF program.. The program operates directly through financial institutions, with the government waiving many requirements normally associated with such loans in order to provide small businesses relief as fast as possible. Your call will be directed for regular unemployment insurance or PUA based on the information you provide on the call. Loan forgiveness. In this case, the two loans will remain separate, however you cannot use the loans to cover the same expenses when you have both of them. These include PPP (the Paycheck Protection Program), EIDL (Economic Injury Disaster Loans), PUA (Pandemic Unemployment Assistance), FPUC (Federal Pandemic Unemployment Compensation), and EIP. In addition, you can apply for a $10,000 advance to help keep you on your feet that does not have to be paid back. After the Department of Justicecharged more than 100 people last year with fraudulently seeking over $360 million in CARES Act emergency loans and other payments, the federal government has taken additional steps this year to combat fraud in federal COVID relief programs. A personal guarantee is not required for the loan. Further reading: Documents Required for the PPP. Having received a PPP offer, your next application will likely be automatically declined by the SBA. My PPP Loan is the Wrong Amount. COVID-19 Small Business Grant Recipients. On March 25, the House Select Subcommittee on the Coronavirus Crisisissued a memo on its recent findingson fraud in these programs. 116-127) requiring companies to provide limited paid sick and family leave to employees impacted by the COVID-19 outbreak. Our reasoning: The EIDL has a long repayment period, so Malone should use it for working capital once his business starts back up again. If you are an independent contractor or self-employed, you may be eligible for Paycheck Protection Program (PPP) loans/grants*, SBA's Economic Injury Disaster Loans (EIDL), and/or Unemployment Compensation for losses of income related to the coronavirus pandemic. PUA pays the same weekly benefits as your regular state unemployment insurance (UI) program, but the benefits are 100% federally funded. You didn't mention if you've tried a congressional inquiry or asked your local district SBA office for help looking more deeply into the notes in your file and letting you know what it specifically says you are getting declined for. Any legal analysis, legislative updates or other content and links should not be construed as legal or professional advice or a substitute for such advice. Second draw loans are available to eligible small businesses with 300 or fewer employees who can demonstrate a loss of at least 25% of gross receipts in any quarter during 2020 compared to the same quarter in 2019. When COVID-19 started to affect his business, he was one of the first ones to apply for the EIDL. The EIDL is a federal small business loan program that supports small businesses during their recovery from the pandemic by providing accessible and borrower-friendly capital. thanks for your answers and opinions. The types of fraudulent representations at issue include the following: eligibility for relief; falsified business, employee, and tax records; and false certifications about criminal records and other issues. He was financially affected by COVID-19, since he cant go out and sell ice cream anymore. If you received the EIDL between January 31 and April 3, 2020, you were able to refinance the EIDL loan into the PPP loan. Streamlined application process. If you qualified for the PPP Loan or the EIDL and didn't get money, you should be ready for the Pandemic Unemployment Assistance Plan which is . The CARES Act does not provide any special tax treatment for these amounts, thus, the EIDL Grant is included in gross income and is subject to federal income tax. Key Takeaways. The biggest changes to unemployment benefits is the additional $600 a week to the maximum amount an individual is eligible for. EIDL Grant does not need to be repaid. The Centers for Medicare & Medicaid Services (CMS) announced expansion of its accelerated/advance payments programto a broader list of suppliers, including audiologists and SLPs, during the COVID-19 pandemic. The program provides a 'First Draw' loan equal to 10 weeks of a companys payroll, up to $10 million. In 2010, Ripley was nominated by President Barack Obama to serve as the United States Attorney for the Middle District of North Carolina. These cases represent over $569 million in attempted fraud from the government and others. Further reading:How to Spend PPP Funds (FAQ). So I have been collecting PUA but starting next week, I am gonna start driving. Those eligible for PUA include self-employed workers, including independent contractors, freelancers, workers seeking part-time work, and workers who do not have a long-enough work history to qualify for state UI benefits. If you believe that your loan size is too small, unfortunately there is little you can do but look for additional relief support elsewhere. Tahani and Kamilah should continue paying their rent and utility bills as usual, and keep records so they can claim a portion of those expenses for forgiveness, using the remaining 25% of their PPP loan. Ideally, he should have applied for unemployment after the PPP funds ran out. In light of these efforts (and with more certain to follow), working with counsel to establish a strong compliance regime will be even more important for companies that have received COVID relief funding from government agencies. https://www.edd.ca.gov/about_edd/coronavirus-2019/pandemic-unemployment-assistance.htm, ABOUT THIS AUTHOR || Chief Correspondent: National, International | If a fire is spreading and evacuations are being ordered, or if a gunman is on a school campus and hostages are being taken, Lucy (lparesh@lalate.com) has it covered. The most likely applicable grounds are the following four. Further reading: What is the $10,000 SBA EIDL Grant? The PPP is meant for all U.S. based small businesses, from sole proprietors to corporations. By rejecting non-essential cookies, Reddit may still use certain cookies to ensure the proper functionality of our platform. Further reading: How the PPP, EIDL, and PUA Work Together. However, the sums are far less. You must maintain headcount as evaluated by full-time equivalents and pay no less than 75% of your employees individual average wages. If you spent it in accordance with the guidance in the time period (now extended to 24 weeks), the amount would be forgiven. If you are an independent contractor or are self-employed and dont have any employees, heres what you need to know about programs to help you. The maximum combined loan amount is $2 million. EIDLs provide small businesses with up to $2 million in working capital to offset losses caused by the COVID-19 crisis. Our reasoning: the PPP is meant to protect paychecks and allow affected workers to receive pay again. The National Law Review is a free to use, no-log in database of legal and business articles. PURPOSE To meet financial obligations and Malone has an ice cream stand called Malones Cones, of which he is a sole proprietor. Global Task Force on Pandemic ResponseAnnouncesAdditional Aid for Southeast Asias COVID-19 Response Boosting Diagnostic Capabilities, The Path Forward: Dr. Fauci Urges Americans to Get Their COVID Booster, U.S. Chamber Statement on President Bidens New COVID-19 Winter Plan, The Path Forward: COVID Vaccine Rollout for Children Ramps Up, but Many More Need the Shot, Vaccine Mandates: The Most Important Questions for Businesses Answered. Because Tom had an existing EIDL when he applied for the PPP, and he was using the EIDL for payroll, his EIDL will be refinanced. I already applied for EIDL and will have to drop PUA because I am gonna work. In passing the CARES (Coronavirus Aid, Relief, and Economic Security) Act and related legislation last year, Congress provided for several different types of emergency pandemic relief to be administered by the Small Business Association and other federal agencies. Login. If I am eligible, it is significantly more money. Pl.us, Stimulus News. In the case that you were collecting unemployment benefits before receiving the PPP, reach out to your state labor department as soon as possible to report the PPP as income. Economic Injury Disaster Loan: An Economic Injury Disaster Loan (EIDL) can provide up to $2 million to small businesses impacted by the coronavirus shutdown. Apply for an EIDL loan online at SBA.gov/disaster. 1) Unemployment Insurance - Standard. Weekly IRS Roundup April 10 April 14, 2023. have already produced seizures of over $626 million. Copyright 2023 Womble Bond Dickinson (US) LLP All Rights Reserved. Some states have laws and ethical rules regarding solicitation and advertisement practices by attorneys and/or other professionals. Civil enforcement moving forward will likely involve two of the statutes involved in the California case: The False Claims Act (FCA) and the Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA). The draws for that total amount will be declared on Line 9 of the Schedule A Worksheet of the PPP forgiveness application. Since full time has been defined as 40 hours for the forgiveness application, you will calculate your employees average weekly hours over the covered period and then divide by 40 to find their FTE. You can use your PPP loan to do any of the following: * You must have claimed a deduction on your 2019 taxes for expenses described in 2, 3, and 4 above. Also get in contact with your employees regarding hiring them back if they have been furloughed to ensure youre meeting headcount requirements. While you can apply for both programs, you cannot collect funds from both programs at the same time. Non-Member: 800-638-8255, Site Help | AZ Topic Index | Privacy Statement | Terms of Use Calling All Community Banks: CDFI Fund Opens Applications for FY 2023 Bank USCIS Removes Form I-693 Signature Requirement, Simplifying the Green Card New York State Adopts Updates to Model Sexual Harassment Prevention Policy, Life Sciences Lifeline - Medical Countermeasures for Biodefense, McDermott Deal Academy 2023 Photovoltaik, Critical Wage & Hour Developments for 2023: New Minimum Wage Laws, Paying Day Rates, and DOL Focus on Pay Equity. Malones income will be covered for the PPPs eight-week period. Workers who are eligible for state UI are not eligible for the PUA program. Under this program, approved lenders will be directly delegated the authority to approve loan and forgiveness applications based on the determination that a borrower was in business on February 15, 2020, and paid employees or contractors. The money is not a loan; it is paid as a grant. No attorney-client or confidential relationship is formed by the transmission of information between you and the National Law Review website or any of the law firms, attorneys or other professionals or organizations who include content on the National Law Review website. In 2010, Ripley was nominated by President Barack Obama to serve as the States! Started to affect his business, he should claim his eight weeks that the PPP covers these... If I am eligible, it is paid as a sole proprietor, he was financially by. Market Integrity and Major fraud ( MIMF ) Unit, and utilities that allow small! Out and sell ice cream anymore 2 million in attempted fraud from the government others! Meant to protect paychecks and allow affected pua and eidl grant to receive pay again ) developed a offer. Covid-19 crisis 10 million offer, your next application will likely be automatically declined by COVID-19. 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