COVID Relief for the Self-Employed

I’m reading #TaxTwitter to try to keep up with the rapid changes happening to help the Self-Employed. The national programs are the Economic Injury Disasters Loans (EIDLs) or the Paycheck Protection Program (PPP): here is a great resource created by Sam Jacobs. I’m also really appreciating the writings of Adam Markowitz and Jeff Levine on #TaxTwitter about these programs.

I think it’ll break down this way:

If you are self-employed and have no employees (or only subcontractors) and your income just went *poof*, unemployment is the way to go. Read my article on how to do it.

If you are trying to keep people on payroll – including you – while *some* income is coming in – or you want to keep staff tooled up and ready for opportunities as they present themselves, the Payroll Protection Program is built for that. With some rudimentary accounting, you’ll be able to get a big chunk of this loan waived, if not all of it. Start out by asking the bank you work with what they’re doing with this now. The funding is dried up at the moment but is likely to resume so it’s still worthwhile to keep an application moving.

Note that this creates a paycheck for the self-employed person based on their prior earnings from this business: if your income was below $600/week in 2019, use unemployment instead.

If you need a cash infusion to get an otherwise viable business over a cash-flow crunch, apply for the SBA Economic Injury Disaster Loan and ask for the $10,000 advance that becomes forgivable, but don’t expect to get more than $1,000 per employee (including the self-employed / business owner for sole proprietors. Apply directly through the SBA.

If you get denied for the SBA EIDL loan, check out the resources available through your local Community Development Corporation. (Here’s what the Franklin County CDC has to say.)

There are also a few grants and charities helping out small businesses: find those through your local Chamber of Commerce. (Here’s what the Franklin County Chamber of Commerce has to say.)