Small Business Relief Quick Guide

Options to help small businesses through the Covid-19 Shutdown

1. Small Business Assistance (SBA) Economic Injury Disaster Loan program, there are two programs

• SBA’s Economic Injury Disaster Loan program provides small businesses with working capital loans of up to $2 million that can provide vital economic support to small businesses to help overcome the temporary loss of revenue they are experiencing
• Small business owners in all U.S. states, Washington D.C., and territories can apply for an Economic Injury Disaster Loan Advance of up to $10,000 in the SBA loan process.

Link to application https://covid19relief.sba.gov/#/

OR

2. Employee Retention Tax Credit

If you receive the SBA loan you are not able to take advantage of the employee retention tax credit

• If you’ve had to close your business or have lost half of your year-over-year revenue, the employee retention tax credit is available to help you cover the cost of keeping your employees on payroll.
• It’s a refundable tax credit you can claim against your payroll taxes for half of any wages you are still paying to your employees, even if they’ve been furloughed or are working reduced hours.
• The tax credits are available to any employer who has been forced to close or partially close as a result of federal, state, local, or tribal orders to limit commerce, travel, or group gatherings as a result of COVID-19 and/or any employer who has experienced at least a 50 percent drop in quarterly revenues, as compared to the same quarter from 2019.
• The credit is provided for wages paid to furloughed or reduced-hour employees, up to $10,000 of wages per employee.
• Smaller employers, with 100 employees or less, can claim the credit for all employee wages, up to $10,000 per employee, regardless of whether or not the employee is furloughed. As the credit is worth 50 percent, this means the maximum credit will be $5,000 per employee

3. Deferring Federal Employer Payroll Taxes

• Employers can defer paying the employer portion of certain payroll taxes through the end of 2020.
• Deferred amounts will become due in two equal installments, one at the end of 2021, the other at the end of 2022.
• Payroll tax deferral is not provided to employers that avail themselves of SBA programs.
• Please discuss with your payroll service provider, as applicable.

Options to provide to your employees or gig workers like Uber drivers, self-employed people, freelancers and contract workers during the Covid-19 Shutdown

All employees gig workers like Uber drivers, self-employed people, freelancers and contract workers that have any of the following, can apply for unemployment benefits.

• Reduced hours
• Not working due to company closure by government mandate

Link to apply for Disaster Unemployment Assistance (recommended to select online) https://www.edd.ca.gov/unemployment/disaster_unemployment_assistance.htm

4. Individuals can now take a “Corona-virus-related distribution” penalty free from a qualified retirement account. Early distribution escapes the 10% penalty but not income tax. Distribution must be paid within the 3-year period beginning in 2020 in order for funds to not be counted as taxable income.