Our team is working hard to keep our clients and our business affiliates updated on all things related to COVID-19. As a reminder, we have
developed the Corrigan Krause Coronavirus Crisis Team (CKCCT) t
o help you receive the information and timely answers you need. Please reach out directly to our crisis team by sending an e-mail request to
ckcrisisteam@corrigankrause.com
. The team will be notified of your inquiry and will respond directly to you within 24 hours.
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Upcoming Tax Deadlines to Note
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July 15:
- All individual returns, trusts, and corporations tax returns are due. Filers can still request an extension; however, the filing deadline for extensions remains October 15, and any taxes due must be paid by July 15.
- All Ohio individual and school district income tax returns (IT1040, SD100), payments with returns, and estimated payments with due dates from April 15, 2020 through June 15, 2020 are extended without interest or penalty to July 15, 2020.
Tax deadlines for quarterly estimated payments:
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SBA Now Accepting New EIDL Applications
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The SBA announced this week that it was reopening the
Economic Injury Disaster Loan
(EIDL) grant and loan program. If you have previously submitted an application, SBA has resumed processing EIDL applications that were submitted before the portal stopped accepting new applications.
As of June 15, SBA will begin accepting new EIDL and EIDL Advance applications from qualified small businesses and U.S. agricultural businesses.
Eligible businesses include:
- Independent contractors (for whom there is expanded eligibility criteria)
- Freelancers
- Sole proprietorships, with or without employees
- Gig workers
- Small businesses with less than 500 employees
- Agricultural businesses
Small business owners can apply for the advance of up to $10,000 ($1,000 per employee), which does not have to be repaid. Independent contractors, freelancers, and gig workers are eligible to receive a $1,000 grant.
To apply, borrowers must complete a form requesting an EIDL, which automatically submits for the advance even if the loan is not granted. These loans may be used to pay fixed debts, payroll, accounts payable, and other bills with an interest rate of 3.75% for small businesses and 2.75% for nonprofits and long-term repayments of up to a maximum of 30 years. Additionally, payments are deferred for the first year.
PPP vs. EIDL
- Can I apply for an EIDL loan and PPP loan?
- Yes, you can receive both loans as long as you use your EIDL loan for different purposes than the PPP loan. The acceptable uses for the EIDL loan if you have a PPP loan are to pay fixed debts, accounts payable and other bills.
- What if I received an EIDL Advance and a Paycheck Protection Program loan?
- EIDL Advances must be deducted from total PPP forgiveness.
- Should I apply for EIDL or PPP?
- It’s important to note the differences between the two programs to see which is more beneficial for your individual situation. However, the latest SBA Interim Final Rule indicates that June 30 is the last day for a lender to obtain an SBA loan number for a PPP loan.
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Main Street Lending Program Now Open
(for program lenders to register)
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Lender registration is now open for the long-awaited Main Street Lending Program, which the Federal Reserve established to support small and medium-sized businesses.
This program was initially designed for businesses that are too big for other programs like the Paycheck Protection Program, but as it has evolved and the minimum loan size has been reduced.
Businesses eligible to apply for this program must have less than 15,000 employees or $5 billion or less in revenue for 2019. The minimum loan size is $250,000, and the maximum loan was recently increased to $300 million. Loan terms include five-year repayment term; principal payments deferred for two years, interest payments deferred for one year; and interest rate of around 3.5% (short-term LIBOR + 3%).
Eligible borrowers can apply for program loans by contacting an eligible lender once the program is fully operational.
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More PPP Changes from the PPP Flexibility Act
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The SBA released two new applications for PPP forgiveness, as the follow-up to the PPP Flexibility Act that recently passed in Congress. The SBA developed a simplified application, the EZ application, which is three pages, and the regular application is now five pages. To use the EZ application, you must meet one of the below criteria:
- you are a self-employed, independent contractor or sole proprietor and have no employees or
- you did not reduce the wages of your employees by more than 25%, and you did not reduce FTEs by the end of the covered period (safe harbors and exceptions apply), or
- you experienced reductions in business activity as a result of health directives related to COVID-19 and did not reduce salaries or wages of your employees by more than 25%.
If none of these three apply, you must use the Full Forgiveness application.
A few highlights from the new applications:
- If you use a 24-week Covered Period, compensation can’t exceed 2.5 months’ worth of 2019 compensation for any owner-employee or self-employed individual/general partner, capped at $20,833 per individual;
- If the Borrower has elected an 8-week Covered Period, compensation can't exceed eight weeks' worth of 2019 compensation for any owner-employee or self-employed individual/general partner, capped at $15,385 per individual.
- For employees that are non-owners, the compensation limit is $46,154 per individual for the 24-week period, which is the new prorated amount of the original $100,000 annual limit.
- The application form is the same for the 8-week Covered Period and the 24-week Covered Period
- 60/40% split for payroll and non-payroll costs is now included in the application
- Paid or incurred rules are the same as previous applications and apply to both the 8- or 24-week Covered Period.
The updated applications can be found here:
Eight weeks or 24 weeks – Which should I choose?
Here are the key items to consider when deciding which covered period works best for your situation:
- If you can spend all of your loan on eligible costs that allow you to receive maximum forgiveness, the 8-week covered period may be right for you.
- If you have not been able to spend appropriate loan proceeds (60% on payroll costs), choosing the 24-week covered period may be a better fit. However, if you choose the 24-week period and your FTE employee count and/or employee wages decrease and are not restored by December 31, you could lose some loan forgiveness. We recommend that you consult your advisor on how to proceed prior to submitting your PPP forgiveness application.
As a reminder, please use our Loan Forgiveness Calculation Templates to help you determine which covered period is most beneficial for your situation, and as always, reach out to our team with any questions.
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Ohio PPE Retooling and Reshoring Grant Program
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For manufacturers and other businesses that have retooled their facilities to manufacture critically needed Personal Protection Equipment (PPE), you may be eligible to receive a grant through the Ohio PPE Retooling and Reshoring Grant Program. Eligible applicants may be awarded a grant of up to $500,000 per facility.
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