What You Should Know About the $1.9 Trillion Stimulus Package

The latest $1.9 trillion stimulus package being discussed and voted on in Congress is slated to hit President Biden’s desk by Wednesday, March 10, 2021. Also known as the American Rescue Plan Act, small business owners should be on the lookout for the latest information, as the bill has yet to officially be signed into law.

The package earmarks money for stimulus checks, small business loans and grants, and unemployment benefits. Small businesses get another $50 billion in aid, this includes support for shuttered venue operators, food service businesses, and more. We highlight the main points that may pertain to you and your business below. For more information, please visit your appropriate state’s government website.

Paycheck Protection Program (PPP)

Another $7.25 billion in funding is being allocated to the Paycheck Protection Program. For small businesses, the forgivable loan program has provided much-needed support for businesses negatively impacted by the pandemic.

Who is eligible?

  • Small businesses, independent contractors, self-employed individuals, sole proprietors.
  • Individuals with felonies (non-fraud-related) may also apply.
  • Individuals with delinquent student loans may also apply.
  • Small business owners who are legal residents (or non-citizen), Green Card holders, and individuals on visas may also apply.

For First Draw PPP Loans and Second Draw PPP Loans, read more at www.sba.gov/ppp.

The previously established two-week window for exclusive PPP loan application by the Small Business Administration (SBA) for businesses with fewer than 20 employees may be over, but you can still apply before the program’s expiration on March 31, 2021.

Economic Injury Disaster Loan (EIDL) Advance Grants

The new stimulus package allots $15 billion for the EIDL program. For eligible businesses with less than 300 employees and in low-income communities, this program can help. The first window allows small businesses to receive up to $10,000 each.

If you experienced more than a 30% loss in gross receipts during an eight-week period between March 2, 2020 and December 31, 2021, compared with your gross receipts from a prior eight-week period, you could be eligible. Gross receipts are defined by the IRS as, “the total amounts the organization received from all sources during its annual accounting period, without subtracting any costs or expenses.”

The second window would help businesses with less than 10 employees who have seen 50% in losses. And finally, the third is for businesses with losses between 30-50% with less than 10 employees. While funds last, SBA must provide $5,000 grants to eligible companies.

Business entities such as sole proprietors and independent contractors are eligible for the EIDL program. If you did not receive the full $10,000 for a previous EIDL Advance, or applied and did not receive any program funding, SBA will reach out if you qualify.

Head over to the SBA’s COVID-19 Economic Injury Disaster Loans page for more information.

Employee Retention Credit (ERC)

An extension of the CARES Act, employers can qualify for this refundable credit if government mandates resulted in full or partial suspension of business operations. If you experienced at least 20% loss in gross receipts this quarter vs the same quarter in 2019, you may be included in this stimulus package. For the 2020 credit, you must show a 50% decline. The ERC can be claimed for as much as $7,000 per employee, per quarter during the last half of 2020. For 2021, that could add up to $28,000 per employee. The extension allows for additional refundable tax credits, up to a total of $33,000 per employee.

Stimulus Checks

Part of the plan includes a third round of stimulus checks. For eligible individuals, this will be a direct $1,400 stimulus check. Singles who earn up to $75,000 can expect the full amount, payments will phase out to those with incomes of $80,000. Couples who earn $150,000 will receive $2,800, that’s $1,400 per person. Payments will decline and cap out completely for those with incomes of $160,000.

Children and adult dependents (like students and those with disabilities) are also eligible for the $1,400 stimulus.

Unemployment Benefits

Unemployment programs that were scheduled to run dry by March 14 have been extended until September 6. Federal unemployment benefits include $300 per week to those still jobless, plus the first $10,200 in assistance will be tax-free.

Benefits are being extended to gig workers and those who are self-employed as well.

Childcare & Tax Credits

Among other highlights, this proposed stimulus package will expand tax credits for low to middle-income families and be refundable for 2021. Child tax credits are going from $2,000 to $3,000 for children between the ages of 6-17 and children aged 5 and younger will be eligible for $3,600. The bill also includes a $25 billion stabilization fund so that childcare centers can reopen. Additionally, $15 billion in grants will be used to support essential workers who need to pay childcare costs. This can come as a huge relief for parents managing distance learning at home while working, small business owners, and essential workers.

Shelved for now was the $15 minimum wage hourly increase. Learn more about how your small business can benefit from the new stimulus package by heading over the SBA’s Coronavirus Relief Options page.

The post What You Should Know About the $1.9 Trillion Stimulus Package appeared first on B-Stock Solutions.

Original Article