New Illinois programs to provide relief to some of the hardest-hit.
If you know anyone who might be in-need of rent or mortgage assistance, these programs are excellent options, but are likely to run out quickly. Please pass along — links to apply are included in the articles.
Renters can get a one-time grant of $5,000 paid directly to their landlord to cover missed rent since March and pre-pay through December, or until the money is exhausted, according to the Governor’s Office. The fund is expected to help about 30,000 households.
The Emergency Mortgage Assistance program will also give up to $15,000 to about 10,000 households with mortgage payments that are past due or in forbearance.
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Saturday, August 8th is the last day to apply for Paycheck Protection Program funding.
As a reminder, the program is open to independent contractors, gig workers, sole proprietorships, partnerships, LLCs, S-Corps, C-Corps, cooperatives, and non-profits, among others.
This recent Forbes article summarizes the current state of the program. If you need assistance calculating the maximum loan based on your type of entity, see this blog post, which links to the SBA guidelines.
If this or any other posts on the website were useful to you, and your financial situation permits it, please consider contributing to my tip jar. This allows me to continue to provide free accounting resources to small businesses who do not have the funds available to hire a CPA.
PPP Forgiveness FAQ released only five days before SBA begins accepting lender applications
I was presuming (in this blog post) that the SBA set an initial date for accepting PPP forgiveness applications of August 10th because surely Congress would have something ironed out before they go on recess, and that these expected legislative changes to the program were the same reason for delaying release of their FAQ (yes, the one they have been promising for the past two months).
Surprise! The SBA FAQ was released late yesterday — I’ll be attending the AICPA Town Hall tomorrow and will post an update afterwards (maybe Friday), but in the meantime, here are the best articles I’ve found on the topic so far.
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The SBA announced a few days ago that they will begin accepting loan forgiveness applications from lenders as soon as August 10th — but don’t be too quick to apply.
“A big reason for these delays is that Congress is debating a new round of COVID-19 relief, which is expected to include a second PPP initiative more targeted than the first one, said Mark Peterson, the executive vice president who heads the AICPA’s advocacy team in Washington, D.C. Those discussions also may include major changes relaxing the forgiveness requirements for the smallest loans, possibly those up to $100,000 or $150,000.”
SBA and Treasury are not expected to release the expected 25-question FAQ for which we’ve been waiting for over a month — not before new relief legislation is signed. Congress is trying to finalize this before going on recess August 8th.
If this or any other posts on the website were useful to you, and your financial situation permits it, please consider contributing to my tip jar. This allows me to continue to provide free accounting resources to small businesses who do not have the funds available to hire a CPA.
From the IRS e-News for Small Business Issue 2020-13 today, a note encouraging businesses to use a new fax line to file Form 7200. The IRS still is ramping up staff and catching up departments post-quarantine, so in order to get your advance payment as quickly as possible, please follow their instructions and use the dedicated fax line.
(If you are working with a payroll company who is filing Form 7200 for you, confirm they are taking care of it — do not simply assume. I’ve already come across two companies so far who won’t do it. Time to switch payroll companies, in my opinion.)
IRS Form 7200 fax line: Employers use Form 7200 to request an advance payment of the tax credits for qualified sick and qualified family leave wages and the employee retention credit. The employer tax credits for qualified sick leave wages and qualified family leave wages apply to those wages paid from April 1, 2020, to December 31, 2020.
Businesses should fax the completed form to 855-248-0552.
Due to scheduled maintenance, the 7200 fax line will be unavailable from August 7 at 10 p.m. to August 8 at 7 a.m. ET.
If this or any other posts on the website were useful to you, and your financial situation permits it, please consider contributing to my tip jar. This allows me to continue to provide free accounting resources to small businesses who do not have the funds available to hire a CPA.
A lot of clients have been reaching out about how to handle the Cook County, Illinois property tax bills that began arriving in mailboxes a few weeks ago — so I just wanted to issue a reminder: although the second installment is technically due August 3, property owners can take until October 1 to pay without any interest charge.
Cook County Treasurer Maria Pappas suggested that property owners should go ahead start making partial payments now — to avoid one big payment on October 1. Any balance due after that date will be charged 1.5 percent per month, as required by state law.
To download a copy of your tax bill or to make a payment, visit www.cookcountytreasurer.com. There is no fee if you pay from your bank account:
Select the blue box labeled “Pay Online for Free”
Search by property address or enter your Property Index Number (PIN) and click “Continue.
You also can download a copy of your bill, check and update key information about your property, such as mailing address or property tax exemptions, and more.
If this or any other posts on the website were useful to you, and your financial situation permits it, please consider contributing to my tip jar. This allows me to continue to provide free accounting resources to small businesses who do not have the funds available to hire a CPA.
On Friday afternoon, July 17, Secretary of the Treasury Mnuchin announced that he would consider recommending to both the IRS and SBA that all PPP loans below a certain amount be automatically forgiven. The PPP loan cap mentioned in the discussion was for all loans under $150,000 (though various lobbying groups have floated other amounts). Loans at this level and below account for 86% of all PPP loans — but only 26% of the funds.
This would allow banks and the SBA to concentrate their reviews on the loans above $150,000 — only 14% of the loans — which make up a whopping 74% of the funds. (Among these large borrowers are the many chains, billionaires, and public companies that arguably were not the “small businesses” the fund was meant to help.)
If this recommendation is made, and if accepted, presumably that would mean that Forms 3508-EZ or 3508 would not have to be filed by the borrower with the PPP lender. Mnuchin did mention that some fraud precaution would need to be involved. We’ll have to wait to learn more.
I’ve been put off by how many of my colleagues have been mining these applications for additional fees (and bragging about it), especially when their small-business clients desperately need all the funds they can get to keep their businesses running. So not only would this move by Treasury aid small business owners, who are already overwhelmed with keeping afloat during a pandemic; as well as lenders, who would be able to spend resources more effectively in examining large loans; but it also would put the brakes on the predatory behaviors of “trusted advisors”.
In light of this exciting new development/ possibility, and the fact that we are still waiting for an SBA/Treasury FAQ — which has been promised for weeks on-end at this point — I have decided to postpone all client meetings and webinars on the topic, to allow for the respective government agencies to provide additional information.
If this or any other posts on the website were useful to you, and your financial situation permits it, please consider contributing to my tip jar. This allows me to continue to provide free accounting resources to small businesses who do not have the funds available to hire a CPA.
I attended the Crain’s Chicago Business Webcast the other day featuring “State of the Illinois Budget with Comptroller Mendoza“, and although I was generally pleased with her handle on the state’s financial situation and her ability to explain it to the audience, I was disappointed that the mediator did not take my question, which was: what are small businesses supposed to do without more state support, especially where tax payments are concerned?
We all understand that Illinois governor has inherited a major fiscal problem — and how it got this way is a complex matter outside the scope of this blog post. But despite this, in my opinion, there simply need to be more forgiveness and deferral options for state sales and income taxes due from small businesses.
For example, the federal government moved the deadline for both first- and second-quarter estimated quarterly taxes to July 15th; but the state of Illinois left them on their original dates (April 15 and June 15). As a result, many self-employed taxpayers and small business owners ended up accidentally paying them late.
And in March, the Illinois Department of Revenue offered short-term relief for late sales tax payments to all registered Illinois retailers operating eating and drinking establishments. But the problem was that the February, March and April sales taxes that were deferred were due in May, June, July and August (along with the sales taxes from the current month). In case you hadn’t noticed… those businesses are in more dire financial straits now than they were back in March.
So let this post serve as a reminder that Payment #3 (of four) of the February-April 2020 deferred sales taxes is due on July 20th. But also let it be encouragement to contact your Illinois state senators and representatives, the Department of Revenue,Governor Pritzker’s office, and Comptroller Mendoza’s office to request leniency where penalties and interest are concerned, and to ask that they consider changing the due dates and waiving all related fees for businesses with balances due of less than $10,000. Small restaurants and bars are no better off now than they were before this pandemic began, and if we want to help them weather the storm, we need the state to help.
If this or any other posts on the website were useful to you, and your financial situation permits it, please consider contributing to my tip jar. This allows me to continue to provide free accounting resources to small businesses who do not have the funds available to hire a CPA.
UPDATE 7/1: It has passed the House as well and is expected to be signed by the President today.
Total shock and surprise… out of nowhere, the Senate unanimously passed a five-week extension to the Paycheck Protection Program application deadline, just a few hours before it was set to expire.
Sen. Ben Cardin, D-Md., the top Democrat on the Small Business Committee, said on the floor that senators picked August 8th because that’s the end of the Senate’s next work period and lawmakers are hoping to pass the next relief package by then.
Additionally, Sen. Susan Collins, R-Maine, who helped negotiate the initial small business portions of the March coronavirus relief legislation, said that the extension would make certain we “don’t see an interruption in this program” while a fifth relief bill is being negotiated in Congress.
The unanimous agreement Tuesday night was unexpected, as lawmakers have clashed over issues regarding the program, including legislation regarding how to possibly redirect the unused $130 billion.
The deadline had recently been extended for a few specific borrowers who challenged some of the requirements in court and won — but this ruling only applied to those specific instances. However, their challenge pointed out some unfair restrictions in the PPP application requirements regarding criminal records that have since been remedied (though none of the online applications I have seen have incorporated the new rules yet). Given the timing of the recent guidance, there were certainly many would-be applicants that would not have been able to apply, and hopefully this extension will help.
There also is simply a huge amount of money left — $130 billion. There was so much confusion and fear about applying and getting loan forgiveness that the funds didn’t make it to many of the intended recipients; many never even applied. For example, I helped three folks this week who thought the program “didn’t apply to them”. Now that the rules are easier to follow, make more sense, require less work, and are clearer, hopefully small business owners will come out of the woodwork and get some much-needed assistance.
The House is expected to pass the measure and the President is expected to sign it. The bill passed in the Senate by unanimous consent.
If this or any other posts on the website were useful to you, and your financial situation permits it, please consider contributing to my tip jar. This allows me to continue to provide free accounting resources to small businesses who do not have the funds available to hire a CPA.
The IRS confirmed in a press release that the July 15th due date for filing will remain as-is, with no further changes.
Treasury Secretary Mnuchin had said last week that he hadn’t ruled out moving the deadline again, but this newest announcement makes it clear that July 15th is the new April 15th.
Taxpayers who can’t meet the July 15 due date can request an automatic extension of time to file — it’s a six-month extension from the original filing date of April 15 (not the extended due date), which means it will extend the time to file to October 15, 2020.
The IRS offers a plethora of filing and payment options and reminds folks that filing an extension gets you more time to file your return, but not to pay any balance due. If you think you’ll have a balance due, I recommend you work with a professional to calculate what it might be, and submit payment with your extension, to avoid penalties and interest on late payment.
If this or any other posts on the website were useful to you, and your financial situation permits it, please consider contributing to my tip jar. This allows me to continue to provide free accounting resources to small businesses who do not have the funds available to hire a CPA.
