Please note: The information below is changing almost daily. Please check back for updates as more information becomes available.
IRS Help is here to help with any of the below programs and to answer your questions or assist you through this rapidly changing set of rules. We can work together with you to help you understand your situation and help you put the information together for your applications.
Information about loan programs
|Economic Injury Disaster Loan (EIDL)||Paycheck Protection Program (PPP Section 7(a)|
|Administrator||SBA||SBA Approved Financial Institutions|
|Amount of Loan||Up to $2 million – Applicants who apply may request and advance of up to $10,000 from the SBA.||Lesser of $10 million or 2.5 times average monthly payroll costs incurred during calendar year 2019|
|• The Gross Payroll approach should be used for both loan application and forgiveness. The guidance also clarifies that employer FICA should not be included.|
|•The $100,000 salary limitation does not include healthcare, retirement benefits, and state and local taxes.|
|•Borrowers can calculate their aggregate payroll costs using data either from calendar year 2019 or from the previous 12 months.|
|•Applicants who use Professional Employer Organizations (PEOs) can provide payroll reports since they cannot produce individual entity payroll tax documents.|
|Interest Rate||For- Profit 3.75% | Non-Profit 2.75%||1%|
|Term/ Maturity||Up to 30 years||2 years|
|Deferral||12 months (interest accrues during deferment)||6 months (interest accrues during deferment)|
|Prepayment||Prepayment is eligible||Prepayment is eligible|
|Eligibility||Small businesses in all U.S. States and territories, including sole proprietors or independent contractors||Small businesses in all U.S. States and territories, including sole proprietors, independent contractors and eligible self-employed individuals|
|Internationally owned organizations located in the U.S.||Internationally owned organizations located in the U.S.|
|Private nonprofit organizations||501 (c)(3) nonprofit organizations|
|Small agricultural cooperatives||501 (c)(19) veterans organizations|
|Tribal small business concerns||Tribal small business concerns|
|ESOPs||Fewer than 500 employees in most instances, more in certain industries*|
|Fewer than 500 employees*|
|Usage||Fixed Debts, payroll and related benefits**, accounts payable and other expenses that cannot be paid because of the disaster’s impact||Payroll and related benefits** Interest on mortgage payments or other debts, rents and utilities|
|Cannot be used for||Refinancing of debt, payment of other SBA loans or lenders, tax penalties, civil fines, repairs of property or other physical damage, pay dividends or distributions to owners or partners||Limited to uses noted above|
|(EIDL may be eligible to be refinanced into a PPP loan)|
|Collateral||If available, collateral will be taken on loans greater than $25,000||No collateral from business or its owners|
|Loan forgiveness and grant eligibility||Emergency grant up to $10,000||Eligibility is based on specific requirements|
|(EIDL may be eligible to be refinanced into a PPP loan)||Forgiveness available on a portion of the loan proceeds if employers retain employees during specified period|
|Forgiveness of non-payroll allowable expenses is limited to 25% of total forgiveness|
|Guarantees||Waives requirement of personal guarantees on loans less than $200k||None|
|Does 2019 Return need to be filed?||No||Will depend on banking institution|
|How long until loan is funded?||2-3 weeks||Unknown|
|Can I Apply Now?||Application process and loans are available now||Application process and loans are available now|
Does my business qualify to receive the Employee Retention Credit?
The credit is available to all employers regardless of size, including tax-exempt organizations. There are only two exceptions: State and local governments and their instrumentalities and small businesses who take small business loans.
Qualifying employers must fall into one of two categories:
- The employer’s business is fully or partially suspended by government order due to COVID-19 during the calendar quarter.
- The employer’s gross receipts are below 50% of the comparable quarter in 2019. Once the employer’s gross receipts go above 80% of a comparable quarter in 2019, they no longer qualify after the end of that quarter.
These measures are calculated each calendar quarter.
How is the credit calculated?
The amount of the credit is 50% of qualifying wages paid up to $10,000 in total. Wages paid after March 12, 2020, and before Jan. 1, 2021, are eligible for the credit. Wages taken into account are not limited to cash payments, but also include a portion of the cost of employer provided health care.
How do I know which wages qualify?
Qualifying wages are based on the average number of a business’s employees in 2019.
Employers with less than 100 employees: If the employer had 100 or fewer employees on average in 2019, the credit is based on wages paid to all employees, regardless if they worked or not. If the employees worked full time and were paid for full time work, the employer still receives the credit.
Employers with more than 100 employees: If the employer had more than 100 employees on average in 2019, then the credit is allowed only for wages paid to employees who did not work during the calendar quarter.
I am an eligible employer. How do I receive my credit?
Employers can be immediately reimbursed for the credit by reducing their required deposits of payroll taxes that have been withheld from employees’ wages by the amount of the credit.
Eligible employers will report their total qualified wages and the related health insurance costs for each quarter on their quarterly employment tax returns or Form 941 beginning with the second quarter. If the employer’s employment tax deposits are not sufficient to cover the credit, the employer may receive an advance payment from the IRS by submitting Form 7200, Advance Payment of Employer Credits Due to COVID-19.
Eligible employers can also request an advance of the Employee Retention Credit by submitting Form 7200.
Who is eligible for the economic impact payment(Stimulus)?
Tax filers with adjusted gross income up to $75,000 for individuals and up to $150,000 for married couples filing joint returns will receive the full payment. For filers with income above those amounts, the payment amount is reduced by $5 for each $100 above the $75,000/$150,000 thresholds. Single filers with income exceeding $99,000 and $198,000 for joint filers with no children are not eligible. Social Security recipients and railroad retirees who are otherwise not required to file a tax return are also eligible and will not be required to file a return.
Eligible taxpayers who filed tax returns for either 2019 or 2018 will automatically receive an economic impact payment of up to $1,200 for individuals or $2,400 for married couples and up to $500 for each qualifying child.
How will the IRS know where to send my payment?
The vast majority of people do not need to take any action. The IRS will calculate and automatically send the economic impact payment to those eligible.
For people who have already filed their 2019 tax returns, the IRS will use this information to calculate the payment amount. For those who have not yet filed their return for 2019, the IRS will use information from their 2018 tax filing to calculate the payment. The economic impact payment will be deposited directly into the same banking account reflected on the return filed.
The IRS does not have my direct deposit information. What can I do?
In the coming weeks, Treasury plans to develop a web-based portal for individuals to provide their banking information to the IRS online, so that individuals can receive payments immediately as opposed to checks in the mail.
I am not typically required to file a tax return. Can I still receive my payment?
Yes. The IRS will use the information on the Form SSA-1099 or Form RRB-1099 to generate Economic Impact Payments to recipients of benefits reflected in the Form SSA-1099 or Form RRB-1099 who are not required to file a tax return and did not file a return for 2018 or 2019. This includes senior citizens, Social Security recipients and railroad retirees who are not otherwise required to file a tax return.
Since the IRS would not have information regarding any dependents for these people, each person would receive $1,200 per person, without the additional amount for any dependents at this time.
I have a tax filing obligation but have not filed my tax return for 2018 or 2019. Can I still receive an economic impact payment?
Yes. The IRS urges anyone with a tax filing obligation who has not yet filed a tax return for 2018 or 2019 to file as soon as they can to receive an economic impact payment. Taxpayers should include direct deposit banking information on the return.
I need to file a tax return. How long are the economic impact payments available?
For those concerned about visiting a tax professional or local community organization in person to get help with a tax return, these economic impact payments will be available throughout the rest of 2020.