By Kathy Bazan, BRC Small Business Consultant
Monday, April 19, 2021
The March 2021 stimulus bill added $10 Billion to the Targeted Economic Injury Disaster Loan (EIDL) Advance (which is a grant) and created an additional $5 Billion grant fund for microbusinesses.
Effective now, you can send a request for a reevaluation of your previous Targeted EIDL Advance application which the SBA declined. Here are the instructions:
- Send an e-mail to: TargetedAdvanceReevaluation@sba.gov.
- Your subject line will be: “Reevaluation Request for [insert your 10-digit application number]”
- In your e-mail, include your
- Application number
- Business name(s)
- Your phone number.
- Important: If you have documentation (e.g., an e-mail or letter from the SBA) which states the reason your application was declined, include that information in you e-mail.
History of the EIDL Grant:
March 2020: In the CARES Act, a new EIDL $10,000 Advance (a grant which you don’t pay back) was created. Unfortunately, the fund ran out of money almost immediately. Some people won the entire $10,000 grant while others were awarded less than the $10,000.
In the December 2020 stimulus bill, money was added to the EIDL Advance but eligibility was restricted to those business owners in low income communities.
In the March 2021 stimulus bill, the EIDL Advance was funded with $10B and a new $5B program for the smallest businesses was created.
- Your entity was started on or BEFORE January 31, 2020.
- Your entity employs not more than 10 employees.
- Your entity has been directly affected by the COVID-19 pandemic.
- Your entity is in a low-income community.
- Your entity suffered an economic loss greater than 50%.
- You can receive a $5,000 grant.
Update on the Restaurant Revitalization Fund Application & Guidelines
It is not open yet but keep hoping!
Sometime prior to the application launch, there will be a 7 day pilot program during which certain businesses will be asked to serve as guinea pigs to test the application portal. SBA will randomly select existing PPP borrowers who are in the RRF priority groups (e.g., women, veterans, people of color). These brave guinea pigs will NOT receive funds before the portal is open to the public.
When the portal opens, during the first 21 days, the SBA will prioritize applications from small businesses (restaurants, bars, wine tasting rooms, craft breweries, food carts, etc.) owned by women, veterans, and socially and economically disadvantaged individuals.
For the 21-day period after that, all eligible applicants are encouraged to submit applications.
Update on the SVOG
It is not open yet but keep hoping!
The application portal for the Shuttered Venue Operators Grant opened April 8 and closed April 9. The SBA hopes to have the technical snafus eliminated so that the portal can accept new applications later this week.
For more information about the Shuttered Venue Operators Grant program, you can visit sba.gov/svogrant.
In this current round of the Paycheck Protection Program, 94% of all loans have gone to businesses with 20 or fewer employees. You can apply for a first or second draw PPP loan until May 31, 2021.
Work Opportunity Tax Credit
What? WOTC is a federal tax credit given to employers how hire individuals from certain targeted groups who have experienced barriers to employment. The program’s goal is to increase diversity in the workplace and facilitate access to good jobs by any American worker.
Who qualifies? An employer can file for the tax credit for a person hired between January 1, 2018 and December 31, 2025. The new hire must come from one of these segments:
- Qualified Veteran
- Summer Youth Employee
- Designated Community Resident (DCR)
- Qualified IV-A Recipient
- Vocational Rehabilitation Referral
- Supplemental Security Income (SSI) Recipient
- Long-Term Family Assistance Recipient
- Supplemental Nutrition Assistance Program (SNAP) Recipient
- Qualified Long-Term Unemployment Recipient
What do you file first? Form 8850, Pre-Screening Notice and Certification Request for the Work Opportunity Credit with your state workforce agency within 28 days after the eligible worker begins work.
How much is the credit? The credit is limited to your entity’s business income tax liability OR how much Social Security tax you owe.
If you have a qualified tax-exempt organization, the credit is limited to the amount of employer Social Security tax owed on wages you paid for all employees for the period you claim the credit.
How do you claim the credit? File Form 5884-C, Work Opportunity Credit for Qualified Tax-Exempt Organizations Hiring Qualified Veterans, as a credit against your employer’s share of Social Security tax.
The credit will not affect your employer’s Social Security tax liability reported on the organization’s employment tax return.
How do you continue to claim the credit?
As the employer, you claim the tax credit
After the required certification is secured, taxable employers claim the tax credit as a general business credit on Form 3800 against your income tax by filing the following:
- Form 5884 (with instructions)
- Form 3800 (with instructions)
- Your business’s related income tax return and instructions (i.e., Forms 1040 or 1040-SR, 1041, 1120, etc.)
If you are a non-profit 501 (c ) 3:
· If you hired a qualified veteran who started work for you between December 31, 2014, and before January 1, 2021, file certification and Form 5884-C, Work Opportunity Credit for Qualified Tax-Exempt Organizations Hiring Qualified Veterans after you file the related employment tax return for that period.
If you have questions or would like more information, please reach out to me at brcconsultant@TualatinChamber.com or (503) 692-0780.
My consultations with you are at no cost and are confidential. Since 2014, I have counseled small business owners on gaining access to capital, marketing, and other topics.