This is a scary and uncertain time we're living in. If you would have told me in January that my slow season would be extended indefinitely and that I would be out of work I would have thought you were nuts. But here we are, unemployed and waiting around for this all to pass while people fight for their lives and to save the lives of others.
There isn't one person I can think of who hasn't been affected by the pandemic in some way and while that brings us all to the "we're all in this together" mantra, it's hard not to freak out about your job, your wages, your hours, and most importantly- your health.
Let me first state that all this information is straight from my accountant, a CPA with her own LLC business and other online new resources and that I am not claiming to know everything but thought this might be helpful all in one place. I will update this, as needed, and as more information might become available. I AM NOT and can not give you legal or accounting advice, but I can refer you to quite a few people that can.
First, lets discuss TAXES...
The deadline to FILE and PAY Federal and State 2019 income taxes and 2020 Quarter 1 estimated taxes has been extended to July 15, 2020.
Let me say it louder for those in the back...
The deadline to FILE and PAY Federal and State 2019 income taxes and 2020 Quarter 1 estimated taxes has been extended to July 15, 2020.
What that means is that if you haven't filed your 2019 taxes yet you have until July 15th to do so. Although, if you're someone who would be getting a refund I don't see why you wouldn't just go ahead and do that since there will be more money in your pocket. The refunds at this point are probably going to be delayed but would go on a first come, first served basis. If you will likely owe for 2019 I would still get in touch with your tax professional to find out what that number is and what your estimated quarterly payment will be as of July 15th. It also means that if you're a small business and would normally have a quarterly payment to make on April 15th that is also postponed until July 15th. Which is great for now, but still worrisome since we don't know exactly how long this stall in business will last. This is why budgeting is EVERYTHING right now. Know what you will owe, and know and set it aside.
Side-Note: If your income for 2019 exceeds 2018 in the sense that it would put you past the guidelines for receiving the stimulus check (Stimulus payment equals $1,200 for single (with adjusted gross income up to $75,000, and a phaseout up to $99,000), and $2,400 for married filing joint (with adjusted gross income up to $150,000, and a phaseout up to $198,000), and $500 per child dependent (under 17 years old)- Then you might want to hold out on filing your 2019 taxes for now as well. But please discuss with your CPA or tax professional for guidance on that.
Next, let's chat about UNEMPLOYMENT...
Per the new CARES Act signed into law on Friday, March 27th unemployment shall now be extended to include self-employed and small business like photographers, musicians, and hairdressers and gig-workers like Uber, Lyft, and other contract style 1099 businesses. There is no separate unemployment website to apply for this kind of assistance, it's done directly through your state's unemployment website.
For your state, just Google: "Unemployment filing for (insert your state here)" and make sure you are selecting the .gov website.
Now, not every state has adjusted their websites and information to reflect this new law, that will probably take time. South Carolina is still awaiting guidance from the federal government on how to implement this as I'm sure most states are. But what I can tell you is that the sooner you apply for it the better. If back pay is granted, you need to have proof that you have at least applied. If you are self-employed meaning your business is your own company as an S-Corp or LLC you need to input that. If you have payroll through your business you will probably qualify before the rest of us since taxes are already deducted and you're paying yourself salary. For those of us that are business that just cut yourself a check or 1099- I haven't been able to talk to a real-life person yet, but my recommendation to follow the prompts to making yourself a new login and filing a new claim. You would be to just input yourself or your business name as your current employer as a manual entry. If I ever get based the busy signal to speak with a person, I will update this with more info. I was denied on my first run and have just re-applied again. You will need to apply each week as the claim weeks run Sunday through Saturday. Even if you are deemed ineligible, re-apply each week. And also remember that if you NOT using a payroll system and are selling gift certificates or still working doing contract work, etc, you will need to input the gross amount you are still making each week into your claims and this will likely effect your pay out.
Pro-Tip: If the website is not accepting your social security number and you keep getting an error message where it displays your name and SSN. Take out your middle initial and re-enter it. For the reason, just put spelled name incorrectly. This worked for myself and 2 others.
The standard weekly unemployment payment for South Carolina is $326 and with the additional benefits approved by the CARES Act there is an additional $600 per week available.
If you are self-employed but do not have a legal business, business license, or pay taxes on your earnings you will likely not qualify for anything other than regular unemployment from a W-2 job if you were laid off because you have no way to prove your income because you never claimed it in the first place. This is a discussion for another time, but for future reference, this is definitely a reason to always make sure you are running your self employment aka your "side hustle" legally.
**Update 4/2/20** Even if declared ineligible by the system they are working on getting that corrected and to distribute funds for those who applied. I have been told you may still have to "look for work" in the smartlink section even though that is not required by the new law.
**Update 4/14/20** Still declared ineligible but I have been assured by publications from the DEW and my accountant that self-employment options are being approved and more direction will be given towards the end of the month. There is also a live webinar on 4/17 at 11:00am (see below)
**Update 4/24/20** There is FINALLY (after so many weeks of waiting) now a link for the PUA Eligibility (Pandemic Unemployment Assistance) on your CUSTOMER MENU section as soon as you log in. Click on the link and follow the prompts to fill in all your information regarding your self-employment. When you are finished, you will need to send on proof of your self employment. A 1099, P&L, or bank statements for your business, as well as either a business license, property titles, or rental agreement, etc. Those documents can be emailed to UI_Documents@dew.sc.gov and once sent you should get an auto reply that they were received. I sent in three proofs, a business license, my 2018/2019 P&L, and my gross and net income documentation where I keep track of what comes in and what I pay myself.
STIMULUS vs DISASTER ASSISTANCE: LOANS and GRANTS
Let's start with knowing the differences in terminology because I think this is REALLY important for everyone to understand what they are potentially getting or getting themselves into.
STIMULUS: Money that is being given by the government, for free, for qualifying citizens with a social security number.
LOAN: An amount of money you are borrowing that will have repayment terms including length of repayment and an interest rate.
GRANT: An amount of money that is given to you based on your situation and is not expected to be repaid.
Here is what I do know about the Stimulus Check being sent by the federal government:
Stimulus payment equals $1,200 for single (with adjusted gross income up to $75,000, and a phaseout up to $99,000). What that means is if you made less than $75,000 in gross income in either 2018 (if you haven't filed 2019 taxes) or 2019 you would receive that full $1200 amount. If you made more than $75,000 in gross income in your last filed income tax that number will be less or $0 if over $99,000.
The Stimulus payment is $2,400 for married filing joint (with adjusted gross income up to $150,000, and a phaseout up to $198,000), and $500 per child dependent (under 17 years old). Same rule from above applies for the joint gross income.
You can’t get a payment if someone claims you as a dependent, even if you’re an adult. In any given family and in most instances, everyone must have a valid Social Security number in order to be eligible. There is an exception for members of the military.
Pro-Tip: You can find your adjusted gross income on Line 8b of the 2019 1040 federal tax return.
We should receive these payments via direct deposit depending on the information you provided when you filed your income taxes. They "say" to expect this money in three weeks... we'll see, only time will tell.
Some people have already received their stimulus check. If you're asking yourself WHY not you it might be for the following reasons...
Here is information on the different types of Disaster and Small Business Loans:
For any small business needing cash flow in South Carolina, you can apply for an SBA loan ASAP, but many won’t have their loan forgiven. It will be paid back over 10 years at approximately 4%. For all small businesses and independent contractors, there is available $10,000 in EIDL loan money if you have been impacted by the economic situation. This assistance also applies to gig workers, independent contractors and freelancers.
Economic Injury Disaster Loan (EIDL) – Through Small Business Association (SBA)
While there are currently no loan forgiveness provisions applicable to EIDL loans, companies that have already applied for or received EIDLs due to economic injury attributable to the COVID-19 pandemic can seek to refinance their EIDL loans under the PPP to take advantage of the PPP’s loan forgiveness provisions. More on this later.
If you need money ASAP, apply for EIDL. This is the fastest way to get cash. Please, contact local SBA office for more information: Economic Injury Disaster Loan (EIDL) – Through SBA
If you apply whether you are accepted or denied, you will receive $10,000 immediately to help you get through this time. It says “within three days” (but it may take longer than this).
Paycheck Protection Program (PPP) – Through your Bank
This is the newest part of the CARES Act. The loans are available until June 30, 2020 for eligible companies to cover the cost of:
Payroll, Health care benefits and related insurance premiums, Employee compensation (with some limitations for employees with salaries over $100,000 and exclusions for employees based outside the U.S.), Mortgage interest obligations (but not principal), Rent and utilities, Interest on debt incurred prior to the loan
There is no collateral or personal guarantee requirement. It is not necessarily a loan, as it may work like a grant too as loan forgiveness is available for certain expenses. This loan may not need to be paid back if used to pay payroll, mortgage interest, rent and utilities for your business.
Loan Forgiveness will be calculated as such: Amounts paid in the 8 weeks starting on the date of the origination of the loan: payroll, interest on mortgage, rent, utilities, wages, health insurance, employee retirement benefits, etc. it will be reduced if there is a reduction in the Number of employees compared to (2/15/19 – 6/30/19) or (1/1/20 – 2/29/20)
If you do not qualify for forgiveness, you will have 10 years to repay the loan at 4% interest rate. Payments are deferred for at least six months. Currently also offered through SBA (above) but more guidelines and how to apply are not yet available.
My takeaway from these loans: These don't really apply to the SMALL single person businesses and gig-workers, they are more so intended for business with payroll, mortgages and business that may have rent and utilities to cover. If your business qualifies with the parameters above then certainly take advantage of these opportunities, but don't assume that this is free money. Always be cautious and understand the terms when borrowing money.
Freelancers Union - Freelancers Relief Fund GRANT
Freelancers Relief Fund will offer financial assistance of up to $1,000 per freelance household to cover lost income and essential expenses not covered by government relief programs, including: Food/Food Supplies, Utility Payments, Cash Assistance to cover income loss due to COVID-19. This program is completely funded by donations and applications open on April 2nd.
Determination and eligibility will be for any independent workers in the US who have earned their income from freelance work and has experienced hardship due to contract cancellations and loss of work, and those caring for immediate family members infected with COVID-19. You will need to show proof so collect your documents and check their website for more information as it becomes available.
So if those loans don't apply to me and I don't get approved for a grant, what do I do?
Applying for unemployment is going to be your best bet for the time being and budgeting your money is the MOST important thing you can do for yourself. There has been no federal talk of relieving people of things like rent, car payments, or health insurance premiums so those are all payments that will need to be made within the coming weeks if not months. What I DO know is that federal student loans have been suspended and do not require payment at this time, not until September. Hopefully that will save some people some cash, but definitely not all. If you're like me, your federal loans are already paid off and all you have left are private student loans through banks. If you don't know which yours is, I recommend logging in and seeing what alerts are made available at the top of the screen. If you still don't know, just call or send someone an email.
Use this time to focus on creativity and growth
There are many places offering free classes for nearly every interest or profession. Just Google it, you'll be surprised what you can find. You can also use this time to read or even write a book. Publish an e-book! Make some How-To videos on YouTube about what you do and how you do it. These are the MOST VIEWED videos in the world and maybe, eventually, could provide some residual income in the future. If you're not much of a teacher you can also use this time to LEARN. Like mentioned, there is probably a YouTube video for nearly anything you want to learn. Back in the day this is how I taught myself to cook!
If you're a musician and looking for ways to be creative or expel some of your positive energy: DIY Musician
Overall, I'm wishing everyone the absolute best through this rough time of uncertainty. I wish there was more help to give and all I can say is to hang in there and budget yourself appropriately for the time being. If this pandemic has taught me anything it would be that your situation can change without notice at any time. It's important to have your own disaster plan in place and always have a budget and savings to pull from when push comes to shove.