#You do not have to TLDR in parenthesis what just happened in the text as if I'm too stupid to understand it.

[scarletfasinera]

Worst thing a writer of a book can make me deal with is talk to me like I'm an idiot who can't understand books while I'm actively reading the book they wrote

[topicprinter]

The 3rd phase of the Coronavirus relief bill has passed the senate with a vote of 96-0. As I promised previously, I’m posting a summary of the parts of the bill that directly impact most small businesses and self employed people. Note that none of this is taken from news sources and it’s just from my interpretation of reading the bill as it’s written. I haven't finished reading the whole thing (yet), but I've read the first 600 pages and skimmed the rest. Before anyone asks: Yes I am bored. Yes I actually do enjoy reading this stuff.Keep in mind that this still has to pass the house on Friday but given the unanimous bipartisan support in the senate and the fact that a vote is already scheduled for Friday in the House it’s probably safe to assume that this bill will pass considering the concessions I saw while skimming that are put in towards the end of the bill.I included some of the bigger non small-business stuff throughout this because some of you may have employees wanting a summary of how this impacts them (or you may be wondering too!). I’m planning on cross posting this to some other subs as well that may be looking for a non news source summary of the bill.(Any numbers in parenthesis at the start of a section are referencing the page numbers shown in the top center of the bill)Full bill text is available hereSmall Business Loan Program Account, CARES ACT(You’ll see this referred to as the paycheck protection loans, small business bailout, small business coronavirus loan, etc)The covered period for this is Feb 15-Jun 30. You are impacted by coronavirus if your business meets the requirements on page 32-33. TLDR: You’re probably impacted unless you have a virtual board game business or make face masks.(14) In addition to small businesses non profits and some other businesses with less than 500 employees are eligible for paycheck protection loans.(15) Independent Contractors and Sole Proprietorships are eligible for paycheck protection loans (note that you have to provide proof of payroll though tax filings like other businesses)(16) Franchisers and sic codes that begin with 72 are eligibleMax Loan Amounts, Underwriting Requirements, & Terms(18) For non seasonal business the max loan amount is the average monthly payroll for 1 year prior to the loan being made times 2.5. Payroll costs include things like group health benefits and sick leave. Seasonal businesses use average monthly payroll costs from Feb 15, 2019 (or March 1) -June 30, 2019 times 2.5 If you’ve been in business less than a year the average monthly payroll for Jan 1,2020 – Feb 29, 2020 times 2.5(21) If you started your business after Feb 15, 2020 then you are ineligible(20) Loan proceeds may be used for payroll costs (including health benefits), interest on mortgages, rent/lease payments, utilities, and interest on debt incurred during the period covered by the bill.(23) Cannot use this loan if you have an application pending for a loan covering these expenses already (like a disaster loan). In other words you can’t take out two loans to cover payroll (you can still take out both loans though).(24) No SBA fee for the loan. Usual requirement that the business is not able to obtain credit elsewhere is waived. No personal guarantee or collateral is required.(25) Loan proceeds that are not forgiven will have a term of 10 years maximum with an interest rate not to exceed 4%.(26) Payment on these loans are deferred and interest does not accrue for 6 months to 1 year.Here’s what expenses will be forgiven(41-43) Payroll costs (including some fringe benefits), mortgage interest, rent and lease payments, and utility payments (gas, water, internet, phone, etc) For things like utilities, rent, & mortgages the initial agreement has to have been signed before Feb 15, 2020.(45-47) Other limitations that can reduce what will be forgiven (primarily less full time staff now than in the prior period the loan is basing funding off of and reductions in wages). Any employee who usually receives $100,000 or more annually is also disallowed.What the lender will require in order to grant you a loan(49-50) Proof of payroll through tax filings, documentation of lease/utility/mortgage obligations. Lender will also need to see proof of the expenses actually being made for forgiveness or else that portion will convert to a normal loan as indicated previously.Existing SBA Loans(73-77) SBA will be providing subsidies to cover existing loan obligations. Check details for your specific program though.Unemployment Benefits(I saw a lot of sole prop and 1099 people asking about this so it may not be applicable if you’re a small business with employees who is planning on taking the loan forgiveness route above to keep folks on payroll)(91) Self employed people and other people who are not normally eligible for unemployment benefits are included. (I’m seeing how they’ll determine base benefits but I’m assuming it will be off prior years’ tax forms – it’s possible that these people will only be eligible for the $600 a week but I’m sure states will have clearer guidance out once the bill passes the house)(92 and 107) Waiting period that some states have in place to receive benefits is now removed(99) Compensation amounts will be what state unemployment plan would have usually paid out plus an additional $600 per week. (I haven’t done the math yet but intuitively it seems like if you’re a small business that pays employees less than $14 an hour or so they’d receive more money from unemployment due to that additional payment allowance if you don’t need them).Rebate Credits(145) Amount of rebate is $1,200 for individuals, $2,400 for joint returns. An additional $500 per qualifying child.(145) Credit is reduced by 5% of any income over $75,00 for an individual, $150,000 for a joint return, & $112,500 for a head of household return until the credit hits zero.(147) Eligible for credit if your first taxable year was 2019 or if you filed in 2018 or 2019. Page 149 has details on what happens if you haven’t filed either of those.(147) Refund will be disbursed directly into any bank account you’ve authorized for IRS payments previously. (I assume if you haven’t done that you get a physical check)Charitable Contributions(171) Everyone can now take up to a $300 above line deduction for charitiable contributions made at any point in 2020. (In other words if you donate $300 this knocks your tax bill down by $66 if you’re in the 22% bracket). Note that this is above line so it is in addition to the standard deduction if you don’t itemize. Not much, but every little bit helps!(173-176) If you’re well off and are looking for a tax benefit at the end of the year then there’s a lot of limitations and caps that are being removed by this bill.Payroll Taxes(189) Information about deferrals of payroll tax payments start hereAlcohol Manufacturing Businesses(212) Alcohol that you use to make hand sanitizer is not subject to excise taxesStudent Loans(333-335) Payments will be suspended and interest will stop accruing on federal student loans.(334) If you are on a loan forgiveness program then any months where payments are suspended will still count towards your program. Same thing applies to teacher loan forgiveness programs with details on page 349.(334) Payments that are suspended will continue to be reported as being paid to credit bureaus so this will not negatively impact your credit.Existing Loans and Credit Card Forbearance(566) If you take a forbearance on payments then the lender has to report your payment as current. (Note that this does not prevent them from categorizing you as a high risk borrower internally which could affect future credit related decisions they make on your account so only request forbearance if you really need it)Property Managers/Rental Property Businesses (567-578)Read 567-578, as you can imagine there’s a lot of details in there.(570) Multifamily property mortgages – If you have a federally backed mortgage loan on your property you can now request forbearance on you loans for 30 days. You can renew this request twice for a total of 90 days. If you get forbearance you are not allowed to evict for non payment or charge fees/penalties to tenants for late payments.(578) Other properties with federally backed mortgages – Basically you can’t kick people out for non payment or start court filings against them for 120 days. It looks like if they’re running a meth lab in their bathroom then you can still kick them out.

[topicprinter]

The 3rd phase of the Coronavirus relief bill has passed the senate with a vote of 96-0. As I promised previously, I’m posting a summary of the parts of the bill that directly impact most small businesses and self employed people. Note that none of this is taken from news sources and it’s just from my interpretation of reading the bill as it’s written. I haven't finished reading the whole thing (yet), but I've read the first 600 pages and skimmed the rest. Before anyone asks: Yes I am bored. Yes I actually do enjoy reading this stuff.Keep in mind that this still has to pass the house on Friday but given the unanimous bipartisan support in the senate and the fact that a vote is already scheduled for Friday in the House it’s probably safe to assume that this bill will pass considering the concessions I saw while skimming that are put in towards the end of the bill.I included some of the bigger non small-business stuff throughout this because some of you may have employees wanting a summary of how this impacts them (or you may be wondering too!). I’m planning on cross posting this to some other subs as well that may be looking for a non news source summary of the bill.(Any numbers in parenthesis at the start of a section are referencing the page numbers shown in the top center of the bill)Full bill text is available hereSmall Business Loan Program Account, CARES ACT(You’ll see this referred to as the paycheck protection loans, small business bailout, small business coronavirus loan, etc)The covered period for this is Feb 15-Jun 30. You are impacted by coronavirus if your business meets the requirements on page 32-33. TLDR: You’re probably impacted unless you have a virtual board game business or make face masks.(14) In addition to small businesses non profits and some other businesses with less than 500 employees are eligible for paycheck protection loans.(15) Independent Contractors and Sole Proprietorships are eligible for paycheck protection loans (note that you have to provide proof of payroll though tax filings like other businesses)(16) Franchisers and sic codes that begin with 72 are eligibleMax Loan Amounts, Underwriting Requirements, & Terms(18) For non seasonal business the max loan amount is the average monthly payroll for 1 year prior to the loan being made times 2.5. Payroll costs include things like group health benefits and sick leave. Seasonal businesses use average monthly payroll costs from Feb 15, 2019 (or March 1) -June 30, 2019 times 2.5 If you’ve been in business less than a year the average monthly payroll for Jan 1,2020 – Feb 29, 2020 times 2.5(21) If you started your business after Feb 15, 2020 then you are ineligible(20) Loan proceeds may be used for payroll costs (including health benefits), interest on mortgages, rent/lease payments, utilities, and interest on debt incurred during the period covered by the bill.(23) Cannot use this loan if you have an application pending for a loan covering these expenses already (like a disaster loan). In other words you can’t take out two loans to cover payroll (you can still take out both loans though).(24) No SBA fee for the loan. Usual requirement that the business is not able to obtain credit elsewhere is waived. No personal guarantee or collateral is required.(25) Loan proceeds that are not forgiven will have a term of 10 years maximum with an interest rate not to exceed 4%.(26) Payment on these loans are deferred and interest does not accrue for 6 months to 1 year.Here’s what expenses will be forgiven(41-43) Payroll costs (including some fringe benefits), mortgage interest, rent and lease payments, and utility payments (gas, water, internet, phone, etc) For things like utilities, rent, & mortgages the initial agreement has to have been signed before Feb 15, 2020.(45-47) Other limitations that can reduce what will be forgiven (primarily less full time staff now than in the prior period the loan is basing funding off of and reductions in wages). Any employee who usually receives $100,000 or more annually is also disallowed.What the lender will require in order to grant you a loan(49-50) Proof of payroll through tax filings, documentation of lease/utility/mortgage obligations. Lender will also need to see proof of the expenses actually being made for forgiveness or else that portion will convert to a normal loan as indicated previously.Existing SBA Loans(73-77) SBA will be providing subsidies to cover existing loan obligations. Check details for your specific program though.Unemployment Benefits(I saw a lot of sole prop and 1099 people asking about this so it may not be applicable if you’re a small business with employees who is planning on taking the loan forgiveness route above to keep folks on payroll)(91) Self employed people and other people who are not normally eligible for unemployment benefits are included. (I’m seeing how they’ll determine base benefits but I’m assuming it will be off prior years’ tax forms – it’s possible that these people will only be eligible for the $600 a week but I’m sure states will have clearer guidance out once the bill passes the house)(92 and 107) Waiting period that some states have in place to receive benefits is now removed(99) Compensation amounts will be what state unemployment plan would have usually paid out plus an additional $600 per week. (I haven’t done the math yet but intuitively it seems like if you’re a small business that pays employees less than $14 an hour or so they’d receive more money from unemployment due to that additional payment allowance if you don’t need them).Rebate Credits(145) Amount of rebate is $1,200 for individuals, $2,400 for joint returns. An additional $500 per qualifying child.(145) Credit is reduced by 5% of any income over $75,00 for an individual, $150,000 for a joint return, & $112,500 for a head of household return until the credit hits zero.(147) Eligible for credit if your first taxable year was 2019 or if you filed in 2018 or 2019. Page 149 has details on what happens if you haven’t filed either of those.(147) Refund will be disbursed directly into any bank account you’ve authorized for IRS payments previously. (I assume if you haven’t done that you get a physical check)Charitable Contributions(171) Everyone can now take up to a $300 above line deduction for charitiable contributions made at any point in 2020. (In other words if you donate $300 this knocks your tax bill down by $66 if you’re in the 22% bracket). Note that this is above line so it is in addition to the standard deduction if you don’t itemize. Not much, but every little bit helps!(173-176) If you’re well off and are looking for a tax benefit at the end of the year then there’s a lot of limitations and caps that are being removed by this bill.Payroll Taxes(189) Information about deferrals of payroll tax payments start hereAlcohol Manufacturing Businesses(212) Alcohol that you use to make hand sanitizer is not subject to excise taxesStudent Loans(333-335) Payments will be suspended and interest will stop accruing on federal student loans.(334) If you are on a loan forgiveness program then any months where payments are suspended will still count towards your program. Same thing applies to teacher loan forgiveness programs with details on page 349.(334) Payments that are suspended will continue to be reported as being paid to credit bureaus so this will not negatively impact your credit.Existing Loans and Credit Card Forbearance(566) If you take a forbearance on payments then the lender has to report your payment as current. (Note that this does not prevent them from categorizing you as a high risk borrower internally which could affect future credit related decisions they make on your account so only request forbearance if you really need it)Property Managers/Rental Property BusinessesRead 567-578, as you can imagine there’s a lot of details in there.(570) Multifamily property mortgages – If you have a federally backed mortgage loan on your property you can now request forbearance on you loans for 30 days. You can renew this request twice for a total of 90 days. If you get forbearance you are not allowed to evict for non payment or charge fees/penalties to tenants for late payments.(578) Other properties with federally backed mortgages – Basically you can’t kick people out for non payment or start court filings against them for 120 days. It looks like if they’re running a meth lab in their bathroom then you can still kick them out.Edit: Messed up a line of formatting