Government Financial Assistance for Businesses and Individuals

The US government is making unprecedented moves to help individuals and businesses during this COVID-19 crisis. Like myself, I am sure you are feeling the effects as our daily life is very different. I know many people are suffering and many businesses are shut down for the foreseeable future. On somewhat of a positive note, the government is trying to scramble and offer assistance for the individuals and businesses that are most effected. Below is a summary of all programs readily available. Please feel free to ask any questions in the comments section. I would also love to hear if anyone has taken advantage of any of the programs.

Late March, the U.S. government executed on a $2.2 trillion economic stimulus bill into law. This was an unprecedented amount and bill that includes giving hundreds of billions of dollars in loans to both small business and large businesses. Also it offers direct payments for up to $1,200 for individuals and includes enhanced jobless aid that would apply to freelancers and gig economy workers. To apply for the stimulus check, you must have a social security number and have filed your 2018 or 2019 tax return. After that, there is a free IRS online tool to speed up your payment. You provide your bank information to the IRS and then you just wait for direct deposit.

For individual stimulus, the legislation sends direct payments of $1,200 to Americans earning up to $75,000 — which would gradually phase out for higher earners and end for those with incomes more than $99,000 — and an additional $500 per child. It also expands jobless aid, where the individual has an additional 13 weeks and a four-month enhancement of benefits, extending them for the first time to freelancers and gig workers and adding $600 per week on top of the usual payment.

For businesses, the legislation providing hundreds of billions of dollars to fund the Paycheck Protection Program (PPP)m which provides government-guaranteed loans to small businesses. The PPP is a loan designed to provide a direct incentive for small businesses to keep their workers on the payroll, and it is administered through the Small Business Administration (SBA). The greatest benefit of this loan is the SBA will forgive loans if all your employees are kept on the payroll for eight weeks and the loan is used for payroll, rent, mortgage, interest, or utilities. Any business that is less than 500 employees and includes sole proprietors, independent contracts, and self-employed persons. The loan will be fully forgiven if the funds are used for payroll costs, interest on mortgages, rent, and utilities (guidance is saying at least at least 75% of the forgiven amount must have been used exclusively for payroll). Loan payments will also be deferred for six months. No collateral or personal guarantees are required. Neither the government nor lenders will charge small businesses any fees. This loan has a maturity of 2 years and an interest rate of 1%.

Another initiative the government has taken is to delay Tax Day from April 15 to July 15, giving taxpayers and businesses extra time to file their taxes without interest or penalties. Also President Trump signed a coronavirus relief package into law on March 18 that provides paid leave benefits and additional unemployment benefits for U.S. workers. The package, which will take effect by April 2, includes new federal employee-benefit mandates and offers several provisions for employers. This includes tax credits to cover two weeks of paid sick leave for employees who have been quarantined, have a sick family member, or have been affected by school closings. Also it provides tax credits for up to three months of paid family and medical leave amounting to no less than two-thirds of regular pay.

Individual states are also offering packages to help their citizens as well. Many are deferring state tax payments until the summer of this year. In Florida, small-business owners with two to 100 employees affected by Covid-19 can apply for short-term loans of up to $50,000. These loans are interest-free for one year.