Category Archives: COVID-19 Financial Relief

COVID-19 Financial Relief, Illinois, Tips

BACP Updates | Chi Biz Strong Initiative

July 12, 2021 Nancy McClelland Leave a comment

City of Chicago :: Business Affairs and Consumer Protection

From the Chicago Department of Business Affairs and Consumer Protection, an update on the myriad changes that Chicago’s City Council made when they recently passed the Chi Biz Strong Initiative — many of which affect small business owners in our city. The list is arranged by the date the legislation is effective.

Note: We have no formal relationship with BACP — just sharing this info as a public service.

July 9, 2021

Dear Chicagoan,

BACP is pleased to announce that Chicago’s City Council passed the Chi Biz Strong Initiative on June 25, 2021. This bold legislative package contains a number of initiatives to help jumpstart our recovery from the COVID-19 pandemic and set our businesses, workers and consumers on the path towards a stronger future. Below you will find an overview of the effective dates and important details for businesses on the various pieces of this broad legislation. BACP will share more information as the effective dates approach, and please do not hesitate to email bacpoutreach@cityofchicago.org with any questions.

Effective June 26, 2021:
Extension of Third-Party Delivery Fee Caps: During the COVID-19 pandemic, the City instituted a 15% cap on fees that Third-Party Delivery Companies can charge restaurants. This fee cap has been extended until 180 days after all indoor dining restrictions are lifted – December 8, 2021 if current regulations remain in place. See here for an industry notice.
Extension of Legalized Cocktails To-Go: Last year, the sale of cocktails-to-go was temporarily legalized to support bars and restaurants during the pandemic. The State of Illinois recently extended this legalization until 2024, and the Chi Biz Strong Initiative ensures that the sale of cocktails to-go from a business with a Tavern or Consumption on Premises-Incidental Activity license remains legal in Chicago during that time. Additionally, this measure allows these businesses to also sell single-serve wine to-go. See here for more information on cocktails to-go.
New Package Goods Operating Hours: No establishment that holds a Package Goods License shall sell, permit to be sold or give away any alcoholic liquor between the hours of 12:00 a.m. and 7:00 a.m. on Mondays through Saturdays and between the hours of 12:00 a.m. and 11:00 a.m. on Sundays, except that a supermarket may commence the sale of package goods at 8:00 a.m. on Sundays. Please see here an industry notice on the new hours of operation for Package Goods Licensees.
Hospitality Reforms: In order to reduce red tape for the hospitality industry and align with state regulations, the term for a special event liquor permits has been extended from 11 to 15 days. Additionally, the requirements for entrepreneurs to receive a liquor or Public Place of Amusement License have been modernized to reduce barriers to entry for returning residents.
Extension of Sidewalk Café Operating Hours: Retail Food Licensees with a Sidewalk Café Permit can now begin operating at 7:00 am, one hour earlier than previous requirements.
Flavored Tobacco Regulations: The sale of flavored tobacco is prohibited in Chicago. This regulation has been clarified to make it clear that the cigarette wrapping paper or wrapping leaf cannot be flavored, even if it does not contain nicotine.

Effective July 31, 2021:
Wage Theft Protections: Almost $400 million in wages are stolen from Chicagoland workers by bad-faith employers every year. Chicago’s first Wage Theft Ordinance will give Chicago’s Office of Labor Standards the authority to hold business accountable for the non-payment of wages required for work performed, with potential violations ranging up to $1,000 per offense per day.
Expedited Restaurant Licensing:
The City is making it easier for new restaurants to open in previously licensed restaurant spaces, provided that the previous restaurant had recently passed an inspection. Beginning July 31, new Retail Food Licenses can be issued by BACP to new restaurants prior to the completion of a health inspection, provided that the previous restaurant had passed their most recent health inspection on or after July 1, 2018 and that other conditions are met to ensure that food is prepared safely.
Fair Marketplace Reforms: Any “Third-Party Facilitator” that connects customers with clients via a digital application will be required to make sure that their clients are properly licensed.

Effective August 1, 2021:
$15 Minimum Wage for Domestic Workers: Effective August 1, 2021, all Chicago domestic workers will be guaranteed a $15.00 per hour minimum wage, no matter the size of their employer. This ensures that domestic workers have access to the full minimum wage earlier than had been previously guaranteed.
Paid Sick Leave Enhancements: Chicago workers are guaranteed one hour of paid sick leave for every 40 hours worked. Starting August 1, the possible uses for that paid sick leave will be expanded to include caring for a family member with a closed school or place of care, compliance with public health orders, and mental and behavioral health.
Chain Business Workers: This initiative will ensure that chain business workers are paid the minimum wage that they are guaranteed under the Minimum Wage Ordinance by clarifying that all workers at a chain business count towards the size of the business.
Public Vehicle Reforms: The public vehicle industry, especially taxicabs, have been hit hard by the COVID-19 pandemic. In order to support the industry, the City will increase vehicle utilization by allowing taxicabs to stay on the road longer – up to fifteen years for fuel efficient or wheelchair accessible vehicles, and up to ten years for all other taxicabs. Additionally, the requirements for individuals to become public chauffeurs will be modernized to reduce barriers to entry.
Charter Bus Reforms: The City will maintain public safety and continue to require charter buses with 15 or more passengers which allow drinking onboard (including BYOB) to secure a separate security guard. Also, trips without any scheduled stops (mobile social clubs) will also need separate security guards. All other charter bus trips with 15 or more passengers will require the driver or someone else on board to be trained in safety protocols to ensure the safety of the passengers. All trips transporting 15 or more passengers must maintain a plan of operation ensuring passenger, driver, and public safety.
New Low-Speed Electric Public Vehicle License: The City will create a new license to promote operation of environmental friendly and sustainable electric public passenger vehicles, three or four wheeled. These vehicles must be powered by an electric motor with a maximum speed of 30 miles per hour may legally transport passengers for hire, with solicitation of rides prohibited. Full licensing details will be available on the BACP website.

Effective January 1, 2022:
Contract Requirement for Domestic Workers: Care workers have been hard-hit by the pandemic and face high rates of exploitation. Beginning in 2022, all domestic workers must be provided with a written contract that sets forth their wage and work schedule to ensure accountability, transparency and predictability. More details will be shared as the effective date approaches.

Effective March 1, 2022:
Legalized Sidewalk Signs: Currently, A-Frame, T-Frame or other temporary self-supporting sidewalk signs are prohibited. Beginning next March, businesses will for the first time be able to receive a low-fee permit allowing them to advertise their business legally with a sidewalk sign. More information will be shared as the effective date approaches.

City of Chicago :: Chi Biz Strong Initiative

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. Ths allows me to continue to provide free accounting resources to small businesses who do not have the funds available to hire a CPA.

COVID-19 Financial Relief, Education, IRS, Site News, Tips

How To Apply For PPP Forgiveness (Loans Over $150K, Non-ERC-Eligible Companies)

July 1, 2021 Nancy McClelland Leave a comment

From the PPP forgiveness guide at – https://bench.co/blog/operations/ppp-loan-forgiveness/

For over a year I’ve been answering the question, “when should we apply for PPP Loan Forgiveness?” And for over a year I’ve been responding, “not yet; there’s still so much that’s up in the air” — as AICPA (thankfully) recommended we wait for legislation from Congress as well as guidance from both the SBA and IRS.

Well, on June 24th, they gave us the green light in the AICPA Town Hall Series. Lisa Simpson said that if you have worked out the interplay between PPP and the Employee Retention Credit (ERC), then you should go ahead and apply.

This means that if you are a sole proprietor or partnership and have no employees, you are ready to apply — since ERC is only an issue if you have W-2 employees or are a W-2 employee of your own company. See my recent blog post for easy instructions.

It also means that if you have employees (or are an employee yourself), but you know that your company does not qualify for ERC, you are ready to apply. See below for less-than-easy but still DIY-worthy instructions.

(Of course, this means that if you qualify for ERC and haven’t worked out the interplay yet, you should consider holding off for now — consider using my recommended approach to moving forward with PPP Forgiveness without jeopardizing ERC, highlighted in a recent blog post.)

So… now what?

For borrowers of more than $150k who had no wage or FTE reductions, or who qualify for a safe harbor/exemption:

As your loan was higher than $150k, you do not qualify to file the simplest PPP Forgiveness form (3508S). However, presuming you followed all the rules and had no reductions, you do qualify for the “EZ” form (3508EZ). Please make sure your lender allows you to use this approach. For reference, here is the forgiveness application form (pages 1-4) and instructions – but for the actual forgiveness process, instead of filling the form out, you will apply through your lender’s loan portal and it will walk you through the steps. Please carefully read through the checklist and instructions on pages 5-9.
Please also read through this Form 3508EZ Step-by-Step guide before beginning the process at your lender’s portal, as the questions you will be asked mirror the actual application.

Some important tips when going through the process:
- Have your original PPP loan application and loan documents handy so you can make sure the info on your forgiveness application matches it exactly (legal name, DBA, address, NAICS code, EIN/SSN, loan number, number of employees at time of loan application).
- Number of employees at time of loan application and forgiveness application are both simple head-counts, not FTEs or full- vs. part-time or anything else.
- Covered Period is the date you received the funds through 24 weeks later, unless you determined a shorter period would be advantageous.
- We recommend the “Amount of Loan Spent on Payroll Costs” total is not any higher than the minimum needed for forgiveness.
- “Requested Loan Forgiveness Amount” should be the exact full total of your PPP Loan.
- If you were unable to operate at full capacity, you may check the second box on the checklist, which means there is no requirement to fulfill the FTE (full-time equivalent) test.

Regarding backup documentation that you must submit with your application, keep in mind that what is considered acceptable support is up to each individual lender.
– Payroll: your lender may ask you for bank account statements, payroll tax form 941s, and canceled checks for benefit invoices as proof of payment.
– Nonpayroll: For rent/mortgage/utilities payments, your lender may ask for documentation that the obligation/services existed prior to 2/15/2020. They are likely to ask for proof of payment for all amounts claimed in this section.

If there is any concern that you might not have fulfilled the wage reduction or FTE tests, or that you do not meet a safe harbor or exemption for them, we strongly suggest working with a trusted advisor to prepare your PPP Forgiveness application, as it gets extremely complicated. Our approach, to be safe, has been to download the free Form 3508 PPP Forgiveness Calculator from the AICPA, regardless of which form you qualify to submit, so as to run all the numbers for the wage reduction test, and fill out the information to see if you are exempt from the FTE test or not. If you are not exempt, the AICPA also offers a free FTE calculator. We then suggest you retain these files as backup in case of audit, even if you end up passing all the tests and qualifying to submit a simpler form than the full 3508.

COVID-19 Financial Relief, Education, IRS, Site News, Tips

How To Apply for PPP Forgiveness (Loans $150K Or Less, No Employees/ Non-ERC-Eligible Companies)

July 1, 2021 Nancy McClelland Leave a comment

(Of course, this means that if you do qualify for ERC and you haven’t worked out the interplay yet, you should consider holding off for now — consider using my recommended approach to moving forward with PPP Forgiveness without jeopardizing ERC, highlighted in a recent blog post.)

So… now what?

For borrowers of $150k or less who are self-employed with no employees:

For self-employed with no employees, it’s an “owner compensation replacement” approach, which means you will have 2.5 months’ worth of your 2019 net profit automatically forgiven. That is why the form is so simple. Your forgiveness amount should exactly equal your loan amount, presuming the original loan was calculated properly.
For reference, here is the forgiveness application form – but most lenders will have you actually apply through their own loan portal, which will walk you through the process. Just be clear that you are a self-employed individual with no employees, that your loan was $150k or less, and so you qualify for Form 3508S.
The best instructions I’ve read are here: How to complete Form 3508S for Self-Employed Individuals with no Employees | SCORE
It should not matter how long you select for your covered period — anywhere between 8 and 24 weeks — but the first- and second-draws cannot overlap (your first loan covered period must be short enough that it ends before your second loan covered period starts).
You can indicate that you spent the entire loan on payroll.
Have your original PPP loan application and loan documents handy so you can make sure the info on your forgiveness application matches it exactly (legal name, DBA, address, NAICS code, EIN/SSN, loan number, number of employees at time of loan application).

And according to AICPA Funding Partner, Biz2Credit, on today’s July 1 webinar (from their PPP Forgiveness Required Documents Customer Guidebook):

(This had been the case for all the lenders I’ve seen so far, but the jury seemed to still be out for some of them, including Biz2Credit — so this was a relief.)

For self-employed folks with no employees, the PPP Forgiveness process should be very straightforward, from everything I’ve seen so far. Please let me know in the comments if you come across challenges, so others can learn from your experiences. Best of luck to you all!

COVID-19 Financial Relief, Education, IRS, Site News, Tips

Client Options for Claiming The Employee Retention Credit (ERC)

June 19, 2021 Nancy McClelland Leave a comment

Note to readers: the issue outlined below only applies to 50%-or-greater shareholders — which means the business is a corporation — and their spouses who work at the company. It does not apply to sole proprietors or partners — those two groups do not get paid via payroll and therefore are not eligible. Shareholders who own less than 50% are eligible if the business meets the other requirements to claim the credit.

If you are a 50%-or-greater shareholder and your company qualifies for the Employee Retention Credit for either 2020 or 2021, please read on.

I truly cannot believe that it’s June 2021 and I’m writing a blog post to help people choose the least-worst 2020 Employee Retention Credit interpretation — because even though the pandemic is starting to show in our rearview mirrors, we are still living in a universe totally devoid of IRS guidance on the topic of ERC shareholder eligibility. Accountants jokingly refer to this mystery as the Tax Advisers’ “Area 51” on #TaxTwitter.

What am I talking about? And why am I so annoyed? Let me set the scene:

1) Many small business owners are eligible retroactively for the 2020 Employee Retention Credit (ERC), and the IRS decided that the corresponding reduction in wages for that credit needs to be on the 2020 tax return.

2) However, the company’s Paycheck Protection Program (PPP) Forgiveness application needs to be prepared before calculating the amount of the ERC, in order to maximize the amount of financial relief the client receives between the two programs. Therefore, at our firm, these returns are all on extension while we run these calculations.

3) Now that the first round of PPP loans are nearing the end of the payment deferment period — and to be fair, we’re also only a few months away from the tax return extension deadline — we would like to finalize those calculations and returns. (Reminder: there is no “deadline” for applying for PPP Forgiveness — per the SBA, “borrowers can apply for forgiveness any time up to the maturity date of the loan. If borrowers do not apply for forgiveness within 10 months after the last day of the covered period, then PPP loan payments are no longer deferred, and borrowers will begin making loan payments to their PPP lender.”)

4) The catch is — that the IRS has still not released guidance on whether or not 50%+ owners of a corporation are eligible for the credit (or their spouses who work for the business). Accountants are split down the middle on what the existing legislation, which is extremely unclear, tells us on the topic. As such, we either need to take a position or continue to wait for IRS guidance.

What’s that? You’re saying the IRS has still not issued essential guidance on a credit that was created in the first month of the pandemic? Yes. Yes, I am.

Recently, both the AICPA and Tony Nitti, two of my most trusted sources, have weighed in on this with a big “why is the IRS dragging their heels on this” reaction. Nitti went as far as to say, “Are wages paid to greater than 50% owners eligible for the credit? If I had a nickel for every time someone emailed me this question, I could afford to stop shamelessly and relentlessly shilling this newsletter. It is absolutely amazing that a full year after the ERC was created, we still don’t have a definitive answer.”

Okay, enough backstory. As a small business owner, what are your options? I call them Choice 1 (yes) and Choice 2 (no) for short:

#1 Calculate ERC as if owners are eligible and file 2020 income tax returns accordingly. This would result in a higher tax for clients (because more wages are disallowed as deductions). Submit PPP Forgiveness applications, but hold off on submitting ERC claims (941-Xs) until guidance is released. If guidance indicates that owners are eligible, file the ERC claims accordingly. If guidance says owners are not eligible, then amend the income tax returns and file the ERC claims accordingly.

This approach may make the most sense when there are two 50%-owners on payroll, and not many other other staff — as the increased credit would be worth the wait, compared to the total credit without owners.

#2 Calculate ERC as if owners are not eligible and file 2020 income tax returns accordingly. This would result in a lower tax for clients (because fewer wages are disallowed as deductions). Submit PPP Forgiveness applications, and submit ERC claims (941-Xs) — rather than holding off on these as in the above option. If guidance is eventually released that indicates owners are not eligible, then no action is needed. If guidance indicates that owners are eligible, then decide whether it is worth amending the income tax returns and ERC claims to get the additional funds.

This approach may make the most sense with only one 50%+ owner and many employees, as the cost to amend all returns and claims will probably not be worth the additional credit.

The goal with both approaches is to get PPP Forgiveness applications and tax returns filed as soon as possible, with the best balance between wage deductions and potential wage credits.

While I was tempted to pick one of these two approaches and inform all clients of our choice, I decided — especially with advice from an AICPA Town Hall — that this is a decision that each client needs to make for themselves. We’re happy to explain the potential costs and benefits of each approach and make a personal recommendation for each client’s individual situation, but the decision should be theirs. We recommend other CPA firms take a similar approach.

COVID-19 Financial Relief, Education, IRS, Tips

2020 Employee Retention Credit FAQ

June 18, 2021 Nancy McClelland Leave a comment

I recently received a few questions based on earlier blog posts, discussions with colleagues, and Slack conversations, and thought it might be helpful to readers to share them all here.

Q: I attended the Compass seminar you recommended and it was super-helpful. I noticed that she didn’t have anything on row 30 of her 941-X, but on the other example we discussed, there were Line 30 entries on her 941-X that was generated by Gusto. Should I have something on line 30?

A: The Compass seminar presenter made a couple mistakes and they issued corrected pdfs afterwards – if you took the course, make sure you have the file called “Corrected_Forms_941-X_for_Case_Study.pdf” to refer to as you are preparing amended 941s to claim the Employee Retention Credit.

The first correction was that column 4 on the 941-X should be negative (even though that math makes no sense on the face of the form).

The other correction was that Lines 30 and 31 are blank in their original examples and should have totals on them. In the seminar, they had entered amounts on the Worksheet 1, Step 3, Line 3a (and 3b if there was health insurance), but then I think they just forgot to also enter them on the face of the form. (In the Worksheet it says these numbers come from Form 941, Lines 21 & 22 – and those correspond to Form 941-X, Lines 30 & 31.)

We built our own Excel version of Worksheet 1 to make all these calculations easier — not hard to do: just copy the last page of the IRS Form 941 instructions, paste into Excel, and set it up to do the simple math. We also made the following notes in Step 3:
a) For Step 3a, “This data will come from the ERC spreadsheet Total Wages row 20 (make sure to add Q1 + Q2 when preparing Q2). Enter on 941-X line 30.”
b) For Step 3b, “This data will come from the ERC spreadsheet Total Benefits row 21 (make sure to add Q1 + Q2 when preparing Q2). Enter on 941-X line 31.”.
c) For Step 3d, “Enter on 941-X line 27 *make sure amount in column 4 is a negative.”
d) For Step 3h, “Enter on 941-X line 18 *make sure amount in column 4 is a negative.”
e) For Step 3i, “Enter on 941-X line 26 *make sure amount in column 4 is a negative.”

Q: Let’s say your PPP2 window is March 1 through August — it sounds like you’re not required to use wages from March 1-31 for your PPP2 forgiveness? You can take all of 1Q 2021 towards ERC and then use wages from April 1 and beyond for PPP2 forgiveness?

A: Yes, exactly – what we are doing in our firm is this: we calculate the minimum amount of wages + health insurance that are needed for PPP – and we use SUTA and retirement first, so that we use as few actual wage + health insurance dollars as possible (because ERC doesn’t use SUTA & retirement). That gives us a “target” that we use in our ERC calculations.

Then we assign wages + health insurance for the PPP period to each employee so as to maximize what’s left over for ERC. The difference has been really amazing, and worth the extra work.

So rather than picking wages to use for ERC based on which quarter they’re in to make it easier for filing, we’re picking them based on what maximizes the amount for ERC.

But the point is — that you can do it however you want, which was the second-to-last big piece of guidance I needed to make this system work to my clients’ advantage the most. (The other piece, whether 50%+ shareholder-EEs count for ERC, is something we’re still waiting on the IRS for. No one can believe they haven’t shared this yet.)

Follow-up question: Where did we land if we have to use every employee for the same duration for PPP forgiveness? So let’s say in the 24-week window you only need 13 weeks to get to forgiveness if you’re including everyone. Instead, could you use 3 employees for 24 weeks and then 2 employees for just 8 weeks (as an example off the top of my head). Or do you have to use all 5 employees for 13 weeks, or whatever it takes? Because in option 2, you’d have 3 extra weeks for the lower paid employees to use for ERC. If that makes sense what I’m asking.

A: There’s no requirement for PPP on a per-employee basis – it’s just a total dollar amount. Amazingly flexible. This analysis is accurate.

Q: The Compass presenter mentioned something about the more than 50% shareholder and whether those wages count. I’ve got two clients who have employee shareholders, and I hadn’t really considered this yet. Do I count their wages?

A: We don’t know! We’re helping clients decide what to do on a case-by-case basis, using this approach (I wrote this up for RRF but it’s still valid for anyone who’s left):
Restaurant Revitalization Fund: Client Options for Tax & ERC Filings | The Dancing Accountant

Follow-up question: Regarding the Shareholder wages— Let me see if I understand it. I have a C-corp where one employee was the founder and basically has 90% of the stock. Is it a question as to whether he counts? And his wife works there as well. So it sounds like either way I cannot include her? Another employee has 10% of the stock. So he counts for sure, right?

A: The 10% employee counts for sure, and we don’t know about the 90% C-corp owner or the spouse that works there, which is why I’m making my clients choose Option 1 or 2 in the blog post I referenced. By coincidence, they reiterated in today’s AICPA Town Hall that we still don’t freaking know the answer here.

Q: What date do I date the JE for “ERC Receivable”? Is it the last date of the quarter for that 941X? (Rather than the date I send the amendment.)

A: Yes, because the IRS decided to be massive jerks and require this to be subtracted from deductible wages in the year of the payroll, rather than the year of the amendment, even for cash-basis tax filers.

Personal rant: after the past two tax seasons, have to admit that I hate Chuck Rettig with a passion.

Q: So if I do form 941Xs, do I need to also send 7200s? Or is that an either/or situation? We definitely want refunds (not just applying refund towards future payments.)

A: No, the Form 7200 is only for advance payments — you would file it to get an advance payment of the refund before the end of the quarter in which you qualify. Once the quarter ends, you claim the credit on the Form 941, and reconcile the amount you’ve already applied to receive in advance. By all accounts I’ve heard, it’s not worth the trouble.

Q: Finally–if I do the 941x’s myself, then do I need to notify that particular payroll company what I’ve done?

A: Not according to Gusto, because it only affects the cash paid, not the liabilities or reported amounts. It’s treated as an overpayment that will be refunded, so it doesn’t change things on their end — but I’m not sure about other payroll companies.

COVID-19 Financial Relief, Tips

Restaurant Revitalization Fund Update: What To Expect Next

May 13, 2021 Nancy McClelland Leave a comment

Excerpt from SBA email informing an applicant that their application for the RRF was approved.

The Journal of Accountancy reported on May 10th that, “a week after opening the $28.6 billion RRF, the U.S. Small Business Administration (SBA) said late Monday afternoon that it had begun sending out more than $2 billion in a first round of funding to restaurants, bars, and other eligible applicants.”

For the first 21 days the SBA will prioritize reviewing applications from small businesses owned by women, veterans, and socially and economically disadvantaged individuals.

After the first 21 days, the SBA will fund all eligible applications on a first-come, first-served basis. Approved applicants should expect an average of 14 days for processing, review, approval, and funds distribution.

So what will this approval look like for you and your clients? The SBA will send an email with the subject “SBA Restaurant Revitalization Fund – Congratulations – Award Approved”. Enough phishers are out there that it pays to be careful, and so some recipients have ignored it because it seems too good to be true, or were suspicious of the no-reply@sba.gov email address. Remember that the SBA will not ask you for any information or provide a link for you in this email. Do not click on any links. If you have any questions, please contact the SBA’s RRF call-center support at 1-844-279-8898. The are available Monday-Friday, from 8 am – 8 pm ET.

When you log into the SBA’s RRF portal that you registered for before applying — restaurants.sba.gov — you will see, on the left-hand side, a “Status” tab. If your application was approved, it will list your award amount, SBA Number, and application status will say “SBA Decision (Approved)”.

The SBA will process the funding of the award directly to the bank account you provided during the application. Again, do not enter any bank information — this was verified during the application process and the SBA will not ask you for it again. If you have any concerns, please call their support line at 1-844-279-8898. The award will be funded within seven business days of the email notification — check your bank account as the final confirmation that this is real.

Make sure to use the restaurants.sba.gov portal to check your application’s status and monitor any messages from the SBA. They will send an email if they have any issues funding the award, but if you are worried about phishing or the message going to your spam folder, the portal and the call center are resources you can access.

UPDATE: For those not yet in the approval stage: it may appear that your application has reverted to a previous step. Please don’t panic — if more information is needed to process your application, you will receive a note directly from the SBA with an email ending in @sba.gov.

In yesterday’s Journal of Accountancy, they noted that the RRF program received 266,000 applications seeking a total of $65 billion, far more than the $28.6 billion Congress allocated the program. As a result, it has less than half the money needed to fund the existing requests.

“Unless Congress passes legislation providing the RRF with fresh funding, the program looks certain to provide the vast majority of its funding to eligible businesses owned by women, veterans, and socially and economically disadvantaged individuals. The American Rescue Plan Act, P.L. 117-2, which created the RRF, mandated that those businesses, which have submitted 147,000 applications totaling $29 billion, receive priority review for the first 21 days of the program,” the Journal notes.

The SBA said it would keep the RRF application portal open for now, because it still has some portion of funding set aside for eligible establishments with 2019 annual revenue of not more than $50,000.

After the first 21 days, the SBA will fund all eligible applications on a first-come, first-served basis, which is why it was so important to submit on Day One.

UPDATE: The Independent Restaurant Coalition released a fact sheet late this afternoon outlining what’s next and it deserves a read.

COVID-19 Financial Relief, Education, Illinois

Chicago BACP Webinars – May 2021

May 4, 2021 Nancy McClelland Leave a comment

BACP offers free business education workshops or webinars every Wednesday afternoon and Friday morning. Due to COVID-19, all programs are currently being offered as webinars. Topics include business licensing, operations, financial resources, marketing, and more. Programs are free and open to the public and taught by industry professionals, not-for-profit agencies, and government agencies.

Wednesday, 5/5 Webinar at 3:00 PM
City Inspections – Ask Questions, Get Answers
Presented by the City of Chicago
The Chicago Department of Business Affairs & Consumer Protection, Department of Public Health, and the Department of Buildings will provide insight on how operate a compliant business in the City of Chicago. Topics covered will include how to prepare for inspections, building permits and sign display requirements, food inspection overview and necessary certificates, and zoning review procedures. Learn how to operate safely and avoid common setbacks.
Register for the 5/5 Webinar

Friday, 5/7 Webinar at 9:30 AM
Business Licensing 101
Presented by the City of Chicago Department of Business Affairs & Consumer Protection (BACP)
Attendees will learn the process to obtain a business license and how to access free resources and support for your business.
Register for the 5/7 Webinar

Wednesday, 5/12 at 3:00 PM
Understanding & Clarifying Your Brand Identity
Presented By: Stacey Pitts Caldwell, Center Director, SBDC at the Chicagoland Chamber of Commerce & Owner, SMP Creative™ Business & Design
Now, more than ever it is critical that small businesses grasp the core concepts of branding to begin developing a strong brand position. In this webinar, you will gain a better understanding of your existing brand, learn what it takes to create a new brand, or simply refresh your basic knowledge of branding to help you connect and engage with your customers. All businesses, from pre-venture and start-ups to established enterprises are welcome to explore the following topics: Brand Identity, Brand Communications, Personality & Inspiration, and Storytelling.
Register for the 5/12 Webinar

Jueves, 5/13 Webinar at 10:00 AM
(workshop will be presented in Spanish)
Licencamiento Comercial 101
Presentado por la Ciudad de Chicago Departamento de Asuntos Comerciales y Protección del Consumidor(BACP)
Centro de Negocios Pequeños(SBC)
Los asistentes aprenderán el proceso para obtener una licencia comercial y como acceder a recursos y soporte gratuitos para su negocio.
Registrarse para the 5/13 Webinar

Friday, 5/21 Webinar at 9:30 AM
Grants, incentives, and FREE assistance for your business
Presented by Andrew Fogaty, Executive Director 36Squared Business Incubator
Every year the City, State and Federal government spends MILLIONS of dollars to provide grants, incentives and free assistance to Chicago area companies. Was your company one of them?
Come to this FREE informative event and learn how your business can access assistance for everything from building improvement and property acquisition to export assistance and government contracting.
Register for the 5/21 Webinar

Wednesday, 5/26 Webinar at 3:00 PM
Transform Your Dream into a Real Startup
Presented by Score Chicago
Do you have what it takes to start and run a successful business? If so, do you know what the start-up journey is like? Or what initial steps you need to take?
This webinar will help you assess your prospects, give you the initial direction you need, and inspire you to move forward to realize your dream. The webinar will also cover pricing, promotion, competition and marketing to give you a competitive edge.
Register for the 5/26 Webinar

Please email BACPoutreach@cityofchicago.org with any webinar questions.

COVID-19 Financial Relief, Education, POS - Point of Sale, Tips

Restaurant Revitalization Fund: Are You Ready?

May 2, 2021 Nancy McClelland Leave a comment

It’s almost here! The SBA Restaurant Relief Fund will begin accepting applications on Monday, May 3 at 11 am Central Time. Are you ready? What should you be doing to prepare?

To our surprise, the SBA announced last week that all eligible restaurants should apply the moment the portal opens on Day One, regardless of whether they are in the priority groups or not. Those not eligible for review in the first 21 days will be time-stamped and reviewed first-come-first-served in the following period. Therefore, if you are a restaurant owner of any type, make sure to take these steps between now and Monday morning if you haven’t already. Don’t wait until the portal opens to get started — be prepared in advance!

First, calculate your potential grant amount to make sure you are eligible. Do not include state and local Covid-19 grants, or PPP funding, in “gross receipts”. For my clients, I recommend you use “gross receipts minus returns and allowances” on Line 1c (Line 3 for Schedule C filers) of your business tax return. The financial relief, by contrast, should either be on the “Other Income” line (state & local grants), or not entered at all (in the case of PPP), as they are considered non-operating income. Ask your tax preparer if you are unsure.

Follow the instructions in this chart to estimate your RRF grant amount. If you were in business prior to 2019, use Calculation #1 — this will be the vast majority of restaurants.

If the amount is less than $1000 (or negative), you are not eligible. Although it’s frustrating that funding will not be available, at least you don’t have to go through the rest of the steps — silver lining!

Presuming your result is $1000 or more, please take the next steps seriously. Funding for this program is not sufficient for the number of applicants. This is your chance to be ahead of the game.

Watch a recent SBA webinar that walks you through the registration and application process.
Review this short, handy step-by-step guide.
Download and review screenshots from the portal.
Register for an SBA RRF Portal account (unless you are applying through your Square/Toast POS). Do not wait until the program opens to register — the system opened up for registration this past Friday at 8 am Central.
- Note: you will need a cell phone to get a Two-Factor Authentication code; this is required when setting up an account.
- This registration is independent of any other SBA account you might have — the RRF portal is a separate website/login.
- Bookmark this site and make sure you have everything you need to easily log in when the program goes live.
If applying through your Square or Toast Point of Sale (POS) system, familiarize yourself with their guidelines. We recommend you only use this option if 1) nearly all of your gross receipts run through the POS; or, 2) your 2020 tax return is not available.
Read the SBA RRF Program Guide.
Read the definitions for “priority groups” (women-owned, veteran-owned, socially-or-economically-disadvantaged individual-owned) — especially for those with more than one owner — to determine if you can self-certify or not.
Download and fill out the sample application.
- You will need to know things like your business entity type, tax ID #, PPP Draw 1 & 2 loan numbers, bank ACH info, owner percentages and tax ID #s, and your very first day of sales.
- As mentioned above, if you were in business prior to 2019, you should use Table 1 and ignore Tables 2 and 3.
- Use this filled-out application as your cheat-sheet when filling out the online application when the system goes live.
Make sure you have all your supporting documentation saved to a single, easily-accessible folder on your computer, and that you have clearly named each file. Acceptable file formats are: PDF, JPG, GIF, TIFF or PNG.
- Preferred proof of gross receipts decline will be your 2019 and 2020 tax returns (unless you are applying through Square/Toast).
  Your 2019 tax return and your 2019 & 2020 POS reports are also acceptable, though they may not include all your gross receipts, so we recommend using tax returns if you have them.
- In addition, you may need the most recent three months of bank statements for the account that will be receiving the grant money, if the “auto-connect your bank” option does not work for some reason.
- Clarity, precision, and organization is what’s important — not volume. Remember that a real human being will review the application at some point. Feel free to include a cover page that explains how you have organized things and what is where, the naming structure, etc.

If you have everything ready-to-go, it should only take 20-25 minutes to complete the application online when the system goes live.

Tips and notes:

Use the most modern browser possible — the current version of Chrome, Edge or Safari.
There are hover-tips practically everywhere on the portal that are really helpful, as well as an excellent searchable “KnowledgeBase” in the lower-right-hand corner of the website.
The SBA recommends you use the “auto-connect your bank” option instead of manually entering your ACH info — it will move through the process much faster and you will not need to upload three months of bank statements. You will be asked to select which of the bank accounts (if you have more than one) to link.
When signing, make sure your Title fits the entity type. (e.g., “Owner” rather than “CEO” for a sole proprietor).
Digital signature via Docusign at the end — if it doesn’t work, make sure your antivirus is disabled or try another browser.
There’s going to be personally-identifying info (PII) during registration and/or signing to make sure you are the person you say you are, so make sure to fill this return out yourself, rather than have your CPA or anyone else do it. Feel free to have them help you prepare the application that you will use for reference ahead-of-time instead if you need assistance.
You will get a confirmation ID. Please take a screenshot of this page.
If you realize afterwards that you made a mistake, call the call center and they will delete your application and you will have to start over.
The SBA will send a message through the portal’s message center if there are follow-up questions. You will receive an email each time there is a message; you do not need to log back in until you get a status notification, but it might be a safe thing to do in case something gets stuck in spam.
You can reach the SBA RRF call-center at 1-844-279-8898 for any issues or questions.

And finally… a few words to set expectations: I have every confidence that the SBA RRF portal servers will go down at some point. Instead of asking non-priority applicants to wait three weeks, they are asking literally every eligible restaurant in the country to apply at the same moment. The SVOG site went down on the first day and it took weeks for them to re-open it — and there are far more restaurants out there than performance venues. Obviously the SBA learned from that experience, so I am hopeful they are addressing these concerns… but it seems a staggered, time-stamped approach would have been safer. All that said, just do what the SBA recommends and apply in the first few minutes, but do not be surprised if you have to click “refresh” all day long. Maybe don’t make any other plans for the day just in case. For up-to-the-minute info, check twitter — either search for RRF or #RRF — this was an amazing community for the SVOG folks to come together for information and support when their issue occurred.

Good luck, everyone!

COVID-19 Financial Relief, Education, Illinois, POS - Point of Sale, Tips

Restaurant Revitalization Fund: SBA Portal Opens 4/30/21 & Goes Live 5/3/21

April 27, 2021 Nancy McClelland Leave a comment

Big news from the SBA that was summarized very well by both the Independent Restaurant Coalition and the National Restaurant Association.

Today, the Small Business Administration announced that Restaurant Revitalization Fund applications will open at 11 am Central Time on Monday, May 3, 2021.

To prepare to apply, please visit restaurants.sba.gov this Friday, April 30th after 8 am Central Time to create your account. We encourage you to register on Friday and submit your application on Monday.

The portal website will be restaurants.sba.gov. We suggest bookmarking this page now for use on Friday and Monday.

Please watch the 90-Second Advocacy Update with Sean Kennedy for a great overview of what’s next. (Spoiler alert: it’s closer to three minutes long.)

The SBA has provided many resources to help you prepare — links for training, recordings, a sample application, and more. Please see below (some info is from the national office and some is from Illinois; mind the time zones).

In preparation, qualifying applicants should familiarize themselves with the application process in advance to ensure a smooth and efficient application. Follow the steps below.

Register for an account in advance at restaurants.sba.gov starting Friday, April 30 at 9 a.m. EDT. If you are working with Square or Toast, you do not need to register beforehand on the application portal.
Review the sample application, program guide and cross-program eligibility chart on SBA COVID-19 relief options.
Attend one of the webinar trainings listed below. These will be recorded and later posted on SBA’s YouTube channel. We will share the recording links via email and on SBA’s social media channels.
- Wednesday, April 28 | 1 p.m. EDT | Register here
- Wednesday, April 28 | 2:30 p.m. EDT | Register here

For more information, visit sba.gov/restaurants.

COVID-19 Financial Relief, Education, POS - Point of Sale, Tips

Restaurant Revitalization Fund: Free Webinar 4/27 – Walk-Through SBA Application

April 20, 2021 Nancy McClelland Leave a comment

Cafe Mustache, Logan Square, Chicago, IL

Restaurant Revitalization Fund (RRF) Update:

A trusted colleague’s firm released an excellent blog post on recent SBA guidance for the Restaurant Revitalization Fund that I encourage you all to read and share.

They are also offering a free webinar the morning of Tuesday, April 27th to walk through the draft application. I recommend registering if you are available at that time.

Apparently, certain Point of Sale systems will be working with the SBA to create online portals to help their restaurant-customers apply with existing POS data. Keep an eye out for anything from your POS provider on the topic.

We continue to prioritize finalizing ERC/PPP calculations for restaurant clients and will be reaching out soon to each of our clients with this information.

Accounting Services for Small Businesses