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COVID-19 General Support
What is the difference between collecting Unemployment versus PPP?
if this is for yourself, you can get PUA (Pandemic Unemployment Insurance) or PPP based on your Schedule C net taxible income or 1099 income. (At 2.5X your average monthly income) However, the Labor Department will deduct any hours you work on your business from your award. So, do the math to see if you have a better benefit from PPP or PUA. If PPP is for your employees, you can still get PUA for yourself with the same rules. However, if you collect unemployment be mindful of the payroll parameters of the PPP when you apply for forgiveness. Do the math first to decide what works for you and your situation. An employee is not eligible for unemployment if they are full time. There are some parameters for part-timers who apply for unemployment.
What are the best options for capitalization for sole owners/proprietors?
You may be eligible for all programs: EIDL, PPP, Idaho Cash Grant, Unemployment Insurance. Perhaps your accountant or SBDC consultant can help you make that determination.
What requirements are there for part-time employees that have other jobs also? Do I have to pay them the part-time wages during the down time with the PPP loan?
That is your discretion. If you want forgiveness for your PPP loan, you will be forgiven to the extent that you keep your total payroll and full time headcount as compared to monthly average of 2019. And you have to use 60% of your award on payroll to get forgivelness. Whatever is not forgiven will be loaned to you at 1% for a term of two years.
Does a business owner need to have the same employees in place before February 15 as thereafter? Is this about the specific employees or the number of employees?
No. They will not check the names of your employees. You must maintain your FTE (Full Time Equivilency) calculated at 1 for each full time employee and .5 for each part time (under 40 hours) employee.
If a small business owner has taken a consistent monthly draw every month for the past few years, but never put themselves on payroll like employees, can the PPP be used for an owners draw?
Yes you can. As long as you can document the draw and employee payroll. If you are a sole proprietory, your award is 2.5% of your taxible income on your Schedule C, Schedule F or Schedule K.
How can this help sole proprietor with no employees? I rent space in a salon to run my business, can this help me?
Yes. 60% must be payroll and your business rent can be a part of the remaining 40% when you apply for forgiveness. You are eligible for PPP at 2.5 X your taxible income as it appears on your 2019 Schedule C or K-1. However, you may want to compare that to collecting Unemployment Insurance.
Does claiming unemployment prevent you from getting PPP?
No. But, you can’t use these monies for the same purpose. So if you collect unemployment be mindful of the payroll parameters of the PPP and that you may have trouble getting forgiveness. Do the math first and track scrupulously.
Do PPP loans cover paid sick leave?
Yes. PPP loans covers payroll costs, including costs for employee vacation, parental, family, medical, and sick leave. However, the CARES Act and FFCRA excludes qualified sick and family leave wages for which a credit is allowed under sections 7001 and 7003 of the Families First Coronavirus Response Act.
What if an eligible borrower contracts with a third-party payer such as a payroll provider or a Professional Employer Organization (PEO) to process payroll and report payroll taxes?
The SBA recognizes that eligible borrowers that use PEOs or similar payroll providers are required under some state registration laws to report wage and other data on the EIN of the PEO. In these cases, payroll documentation provided by the payroll provider that indicates the amount of wages and payroll taxes reported to the IRS by the payroll provider for the borrower’s employees will be considered acceptable PPP loan payroll documentation.
Will workers qualify for unemployment benefits if the coronavirus (COVID-19) causes an employer to temporarily or permanently shut down operations?
Unemployment insurance benefits are available to individuals who are unemployed through no fault of their own. If an employer shuts down operations and no work is available or reduces an individual’s hours due to a drop in business, this would be considered a lay off due to lack of work and the individual may be eligible for benefits. Anyone can apply for benefits, and it will be evaluated on the individual merits.
If an employee receives unemployment benefits as a result of a coronavirus-related business shutdown, will my unemployment insurance account be charged?
It depends. Part of Gov. Brad Little’s emergency proclamation provides that experience rated employers (most businesses) will not be charged for unemployment claims attributed to COVID-19. There is no change to cost reimbursed employers. Cost reimbursed employers include non-profit and government employers.
Will my employees be required to look for work if I had to temporarily or permanently shut down operations for work because of coronavirus (COVID-19)?
It depends. If they are unemployed due to COVID-19 related reasons and you are plan on having them return to work, they are not required to register for work or seek work. They will need to answer ‘yes’ to the question asking if they're returning to work on the UI application. If they are not returning with you, they will be required complete two work search activities per week.
How can a company get workers back if they are considered attached and the company reopens but the employees would prefer to get unemployment insurance instead?
First, be sure you communicate the expectation to return to work with as much detail as possible at the time employees become separated. Then, ensure they were clearly instructed to come back — speak with them, send an email to the email address, text them, etc. Then, let the Idaho Department of Labor know who didn’t come back. That person is missing available work and would need a qualifying reason to do so and may lose their benefit. (either a personal compelling reason or an illness, and even then it has to be less than 1/2 of their weekly benefit amount).
I heard about an additional $600 more per week? When does this start?
Originally the CARES Act includes Federal Pandemic Unemployment Compensation (FPUC), which adds an additional $600 to each claimant’s weekly payment until July 31, 2020. As of 1/1/2021 This is effective until 3/31/21 there will be an additional $300 per week.
If there is a separation due to the coronavirus, am I required to pay accrued vacation/PTO or sick pay?
It depends. Idaho law does not require the payment of vacation, holiday or sick pay. These items are agreed upon between the employer and the employee. If there is any change in a policy, the employee must be notified prior to the change. For U.S. Department of Labor Wage and Hour guidance on issues around COVID-19, its effects on wages and hours worked under the Fair Labor Standards Act and job-protected leave under the Family and Medical Leave Act.
What are the specific steps (verification process) to obtain loan forgiveness (conversion to a grant) on the PPP?
The PPP is forgivable if you spend 75% of your loan on payroll to the extend that you match your full time head count and dollar amount of your monthly average of 2019 and up to 25% on business mortgage interest, leases, and utilities. The actual “process” for doing this hasn’t not yet been revealed but you will reapply through your banking institution.
Are there any additional grants or assistance help in Idaho beside the Federal relief fund?
Idaho is offering $10,000 grants to any business who did not get other assistance, who are registered with the Idaho State Tax Commission and have a TAP account. Idaho is also offering a variety of municipal grants. Check with your city to see what is being offered.
Are these loans going to be taxable?
PPP and EIDL are not taxible and the expenses are deductable for federal taxes.
For the self-employed, is the Pandemic Unemployment Assistance benefit to be based on the sole proprietor's gross income or based on net profit?
Net taxable income taken from your 2019 tax return.