SBA PPP and EIDL Small Business Loans (some money is forgivable)

[Deal Guy]

Does it allow, if you were forced to take unemployment due to above reasons?

[123-Rosh]

Can a self employed take both the family leave and unemployment for the same days?

[cgr]

Can a self employed take both the family leave and unemployment for the same days?

You need to have wages/income to qualify for FFCRA. While you can't technically attribute certain dollars earned to certain days (hence the simplified SE calculation), being on full unemployment is definitely a disqualifier.
I'm not sure about partial UI, but should be eligible.

[123-Rosh]

You need to have wages/income to qualify for FFCRA. While you can't technically attribute certain dollars earned to certain days (hence the simplified SE calculation), being on full unemployment is definitely a disqualifier.
I'm not sure about partial UI, but should be eligible.

To be more specific:

John earned $100,000 in self-employment income in 2020. He worked from July 1st until Dec 31st.

From April 1st until June 30th he was on unemployment. He was also taking care of his children during those 3 months, because their schools were closed, so he is also entitled to Paid Sick and Family Leave for those 3 months (based on his total annual 2020 earned income/260).

Can he claim the credit for those 3 months if he also received unemployment for those 3 months?
NJ

[cgr]

To be more specific:

John earned $100,000 in self-employment income in 2020. He worked from July 1st until Dec 31st.

From April 1st until June 30th he was on unemployment. He was also taking care of his children during those 3 months, because their schools were closed, so he is also entitled to Paid Sick and Family Leave for those 3 months (based on his total annual 2020 earned income/260).

Can he claim the credit for those 3 months if he also received unemployment for those 3 months?
NJ

Not if he was on full unemployment. The DOL states this clearly in the FAQs.

[ShimshonK]

PPP
EIDL
FFCRA

ERC is only for employees, and is not available to the self-employed individual.

Thanks.
PPP 2nd draw and EIDL can both be taken, at the same time, immediately as soon as applications open, or is there something I'm missing?

Also, I'm under the assumption that no programs at all are eligible for a business opened after 2/15/20, please correct me if I'm wrong.

Lastly, I remember this was discussed by the first round but I don't remember the conclusion. One cannot receive unemployment and use their PPP funds at the same time? Even if the unemployment was coming from PUA in a DIFFERENT business? And, does it matter if the unemployment claim is still pending and funds are not actually coming through for the time being (presumably it should be paid out eventually)?

[cgr]

Thanks.
PPP 2nd draw and EIDL can both be taken, at the same time, immediately as soon as applications open, or is there something I'm missing?

Yes, you can receive both PPP and the EIDL grant.

Also, I'm under the assumption that no programs at all are eligible for a business opened after 2/15/20, please correct me if I'm wrong.

ERC and FFCRA.
There's no real guidance for ERC for companies that opened in 2020, so it's unclear how one would be eligible.

Lastly, I remember this was discussed by the first round but I don't remember the conclusion. One cannot receive unemployment and use their PPP funds at the same time? Even if the unemployment was coming from PUA in a DIFFERENT business? And, does it matter if the unemployment claim is still pending and funds are not actually coming through for the time being (presumably it should be paid out eventually)?

If you want to claim for a week that's part of your PPP covered period, you need to follow your state's partial unemployment rules.
Remember: til 3/14 while the $300 is available, a $1 UI payment is enough to trigger the $300.

[ShimshonK]

ERC and FFCRA.
There's no real guidance for ERC for companies that opened in 2020, so it's unclear how one would be eligible.

That would be nice for new 2020 businesses, guess we'll await further guidance on that.

If you want to claim for a week that's part of your PPP covered period, you need to follow your state's partial unemployment rules.
Remember: til 3/14 while the $300 is available, a $1 UI payment is enough to trigger the $300.

And for a Schedule C PPP loan, you must use a covered period of 11 weeks? (Can't just claim it all in 1 week?)

[cgr]

And for a Schedule C PPP loan, you must use a covered period of 11 weeks? (Can't just claim it all in 1 week?)

8-24 weeks.
So you can take it over a minimum of 8 weeks and a maximum of 24.
If this is your second draw loan and you're not rushing to use it over 8 weeks to qualify for second draw, you can spread it over 24 weeks which would give you less of a PUA/UI reduction.

[ShimshonK]

8-24 weeks.
So you can take it over a minimum of 8 weeks and a maximum of 24.
If this is your second draw loan and you're not rushing to use it over 8 weeks to qualify for second draw, you can spread it over 24 weeks which would give you less of a PUA/UI reduction.

Gotcha. So even though the loan was for 11 weeks of payroll (2.5 months), it can be forgiven after being 'distributed' in only 8 weeks.
So, when applying for forgiveness, a Schedule C PPP borrower has the flexibility to say they paid themself during any 8 or more weeks timeline within the 24 week period, and for PPP purposes it doesn't need to be determined beforehand (though, to certify for unemployment benefits, you'd need to know the current PPP timeline). Is that right?

[Abe100]

 A LLC who toke a PPP round one on w2 wages only, and didn't include K1 income, can apply for round 1 to maximize the full potential loan? Can they then go for round 2 immediately? What's the best approach?

[cgr]

Gotcha. So even though the loan was for 11 weeks of payroll (2.5 months), it can be forgiven after being 'distributed' in only 8 weeks.
So, when applying for forgiveness, a Schedule C PPP borrower has the flexibility to say they paid themself during any 8 or more weeks timeline within the 24 week period, and for PPP purposes it doesn't need to be determined beforehand (though, to certify for unemployment benefits, you'd need to know the current PPP timeline). Is that right?

Correct.

[cgr]

PSA:
The SBA will allow partnerships (K1 1065) who accidentally didn't apply for all partners with income on line 14, to revise their original application and add in the missing partners, to receive the difference in their total eligible loan.

NOTE: To be eligible for a Second Draw loan, you must have used up all funds from your First Draw loan correctly. If the above pertains to you, you'll need to file for the increase, use it over 8 weeks to reimburse the missing partners, and only then can you apply for Second Draw.

[cgr]

A LLC who toke a PPP round one on w2 wages only, and didn't include K1 income, can apply for round 1 to maximize the full potential loan? Can they then go for round 2 immediately? What's the best approach?

K1 1065 or 1120S?
Only 1065 line 14 is eligible. The below might pertain to you if not all partners were included (I do not know if it also pertains if no partners were included.)

PSA:
The SBA will allow partnerships (K1 1065) who accidentally didn't apply for all partners with income on line 14, to revise their original application and add in the missing partners, to receive the difference in their total eligible loan.

NOTE: To be eligible for a Second Draw loan, you must have used up all funds from your First Draw loan correctly. If the above pertains to you, you'll need to file for the increase, use it over 8 weeks to reimburse the missing partners, and only then can you apply for Second Draw.

[123-Rosh]

If someone had an sole proprietor LLC but didn't open a bank account until July 2020, but had income before Feb 15, 2020, however that income was deposited into his personal bank account, should he apply for PPP on the LLC name or on his own name? Same question for EIDL.

[cgr]

If someone had an sole proprietor LLC but didn't open a bank account until July 2020, but had income before Feb 15, 2020, however that income was deposited into his personal bank account, should he apply for PPP on the LLC name or on his own name? Same question for EIDL.

To get the highest loan possible, it would be best to find a bank that will look at both entities as a continuation, and while the loan would be issued to the currently active entity, it could be based on a total of both entities (both payroll/SE net income and 25% reduction)- I'm working with a bank on this now, and will post here once I receive confirmation that they can do this.

I believe this applies to at least two other forum members.

[AsherO]

I'm working with a bank on this now, and will post here once I receive confirmation that they can do this.

I believe this applies to at least two other forum members.

#golden

[123-Rosh]

For PPP First Draw you can use 2019 or 2020 self employment and payroll to calculate the amount of the PPP Loan? Or just Second Draw?

[Deal Guy]

8-24 weeks.
So you can take it over a minimum of 8 weeks and a maximum of 24.

What does it mean "a minimum of 8 weeks"?

If a self employed schedule c or partnership with zero employees, got the ppp, and immediately transferred the entire amount into their personal checking account, did they satisfy the minimum 8 weeks, since they did it all in just one day, and not 8 or more weeks?

[cgr]

For PPP First Draw you can use 2019 or 2020 self employment and payroll to calculate the amount of the PPP Loan? Or just Second Draw?

You can use 2020 for First Draw as well (only worth it if it's more than 2019 obviously).