*Updates to this blog will be typed in RED. This post was last updated 4/16/20
The Impact Hub Honolulu team has been working hard to comb through the fury of Small Business Administration (SBA) loans, grants and unemployment insurance opportunities for small businesses, independent contractors, non profits, and self employed during this COVID-19 pandemic. The Coronavirus Aid, Relief, and Economic Security (CARES) Act has helped push monies for the small businesses and individuals who are furloughed or unemployed.
Below are summaries and links of: 1) SBA Grants and Loans for COVID-19, 2) Unemployment Insurance Options, 3) Employee Retention Payroll Tax Credit and 4) Payroll Tax Deferral for Employers
1.SBA GRANTS AND LOANS FOR COVID-19
- If you are a small business and looking to furlough or layoff employees completely so they can receive unemployment insurance and save on payroll costs, weigh the option of maintaining them on payroll in order to apply for the Paycheck Protection Program (PPP) described in the table below.
- All individuals, small businesses, non profits, self employed and sole proprietors can apply for the Economic Injury Disaster Loan (EIDL) HERE and receive $10,000 within days. Update 4/16/20: SBA is giving a grant of $1,000 per employee to each small business up to $10,000. These funds can be used for payroll, rent, utilities and mortgage payments.
- The SBA has a Google Folder that is open to the public HERE.
- EIDL Loan Update: If you applied before March 30 and haven’t received a loan number, follow up with SBA by calling the info line at 1-800-659-2955. (4/6/20)
- Typically SBA EIDL respond within 3 days, Expect delays (4/6/20)
2. UNEMPLOYMENT INSURANCE OPTIONS FOR ALL
The CARES Act allows the Department of Labor support the Unemployment Insurance (UI) program with additional compensation. Remember, that if you are a small businesses with employees you will need to rehire them to maintain your average number for payroll in order to receive the PPP grant listed in the table above.
- UI has been expanded its eligibility for Hawai’i residents. In other words, more people can receive UI than before.
- Residents receive an additional $600 per week on top of what they would get for UI payments until July 31, 2020
- UI benefits have been expanded for a longer duration of 39 weeks
UI Updates from Office of U.S. Senator Brian Schatz (PDF Version HERE)
3. Employee Retention Payroll Tax Credit
The CARES Act created a tax credit that applies to small businesses as another option for those that do NOT participate in the PPP as mentioned above and keep their employees on payroll.
- For employers with 100 or fewer full-time employees, they may claim a credit for wages paid to all of their employees, up to $10,000 a person.
- Employers are eligible if they have been fully or partially suspended as a result of a government order (such as mayor and governor orders to stay at home), or if they experience a 50 percent reduction in quarterly receipts as a result of the crisis.
- The credit can be claimed against the business or non-profit’s quarterly payroll tax liability and is fully refundable to the extent of excess.
4. PAYROLL TAX DEFERRAL FOR EMPLOYERS
CARES Act allows for employers to defer, or not pay payroll taxes for the rest of calendar year 2020, and have them pay later when things are “up & running” again. Employers will have to pay in 2 equal payments: at the end of 2021 and the end of 2022.
- You cannot participate in this deferral if you receive a SBA PPP loan and or grant as mentioned above.
DETAILED SUMMARIES DONE BY OTHERS (Updated 4/9/20)