When the pandemic struck, and businesses closed, the federal government had to act fast. Both parties worked together to create the Coronavirus Aid, Relief, and Economic Security (CARES) Act, which provided several forms of financial relief for various segments of the population. It was recently followed up on with the Coronavirus Response and Relief Supplemental Appropriations Act (CRRSAA) of 2021.
Here are some of the main programs and how you can take advantage.
Stimulus
Both stimulus payments have gone out so far. If you missed it, though, you might still be able to get both through the Recovery Rebate Credit on your 2020 tax return. This credit will effectively pay you your stimulus, reducing your taxes owed or increasing your refund.
In general, if you were a US citizen or US resident alien in 2020, couldn’t be claimed as a dependent by someone else, and had a valid Social Security number, you can claim the credit.
Your payments begin phasing out at $75,000 adjusted gross income ($112,500 head of household and $150,000 married).
To figure your credit, first make sure you received IRS Notice 1444 and Notice 1444-B (each one has information regarding each payment). Refer to these while filling out the Recovery Rebate Credit Worksheet when doing your taxes. Most tax software programs will help you out here.
Paycheck Protection Program (PPP)
Do you run a business? You can get low-interest (1% fixed), potentially forgivable loans to cover payroll and other vital business expenses.
First-time borrowers can apply for the First Draw PPP loans, while returning borrowers can go for the Second Draw PPP loans if eligible.
To apply for the right loan, you’ll have to visit the SBA website to get an application and follow the instructions.
You can only apply for loan forgiveness once you’ve used all loan proceeds, and you’ll only qualify if at least 60% of proceeds were used on payroll, with the rest on eligible expenses (both spend and incurred) like
- Rent
- Mortgage interest
- Utilities
The Second Draw PPP loans have been expanded to include other expenses, like
- Software
- Civil unrest-related property damage
- COVID safety precautions
- Certain supplier costs
Additionally, you must have spent all proceeds within 24 weeks of funding.
