[Toolkit] Financial relief

[Toolkit] Financial relief https://wahospitality.org/wp-content/uploads/2020/08/time_money_balance.jpg

Relief programs in 2022 – info and updates 

This is a brief list of programs created to help businesses and employees impacted by the coronavirus pandemic. This list is updated regularly to reflect the current status and ensure accuracy. The list includes a status update on federal and state relief programs and tax credits provided by the U.S. Small Business Administration (SBA), U.S. Internal Revenue Service (IRS) and the Washington State Department of Commerce.  

Contact your tax advisor for more information possible financial relief options for your business. Members of the Washington Hospitality Association also receive a 30-minute consultation each year with experts from our Advisory Network. Simply call 800.225.7166 and we’ll connect you to one of our Advisory Network tax consultants. 

Latest News

EIDL program exhausts funding
May 12, 2022

Late last week, the U.S. Small Business Administration (SBA) announced they had exhausted the remaining COVID-19 Economic Injury Disaster Loan (EIDL) funds. This is disappointing news to say the least, especially for those members who submitted applications that have yet to be approved.

This sudden announcement caught everyone by surprise and led to some confusion about pending applications. We reached out to the SBA to get clarity about the program’s status.

 

PPP loan forgiveness – Apply before payment notices begin
May 11, 2022

Hospitality businesses that received a second draw Paycheck Protection Program (PPP) loan in 2021 still have time to apply for loan forgiveness. PPP repayment for unforgiven loan portions begins 10 months after the end of the PPP covered period. The U.S. Small Business Administration (SBA) reports that $45.5 billion in 2021 PPP funds have gone unforgiven even though most of these loans are eligible for forgiveness.

Simplified forgiveness options through the SBA Direct Forgiveness Portal (Form 3508S) are a great option for PPP borrowers of $150,000 and less.


Economic Injury and Disaster Loan (EIDL)
May 6, 2022

The Business Journals – Exclusive: SBA’s EIDL program exhausts its remaining funds

The Small Business Administration’s $345 billion Economic Injury Disaster Loan Covid-19 relief program has exhausted its remaining funds, SBA Administrator Isabel Guzman confirmed in an exclusive interview with The Playbook on Thursday afternoon.

The popular loan program officially closed to new applications at the end of 2021, but small-business owners who had already received funds were able to request additional amounts. Small-business owners who were already working their way through the reconsideration process could also get approved as long as funds were available.

Click here to read the full story…

 


Since 2020, the COVID EIDL program has provided more than $351 billion to 3.9 million borrowers. In September 2021, restaurants worked with the SBA to increase eligible EIDL amounts and allowable expenses, including debt financing.

The EIDL closed on Dec. 31, 2021. If you have already applied for the loan and are awaiting funds, there are useful resources available:

For more information on how you can benefit from the EIDL program, check out this webinar led by the National Restaurant Association earlier this summer and a group letter urging SBA Administrator Guzman to adopt changes to the EIDL program.  

Resources: 

Read more about the payment schedule and loan deferment here. 

Learn the details of the loan on the SBA website here. 

Employee Retention Tax Credit (ERTC) 

Update: Introducing the ERC Support Center

The Employee Retention Tax Credit is one of the best relief programs still available to businesses, but it can be complicated and time consuming. With this in mind, the Washington Hospitality Association partnered with Adesso Capital to provide members with the help they need to qualify for up to $26,000 per W-2 employee – without the headache. You can talk to one of Adesso’s tax experts by calling 888-856-0630 or you can get the conversation started online here.

Current status 

Employers can still apply for relief and eligibility is determined by quarters in 2020 and 2021. 

The Employee Retention Tax Credit (ERTC) was originally included in the CARES Act to provide a tax credit for employers who pay qualified wages to employees during the pandemic. It has since been extended so eligible employers can apply for the credit for qualified wages paid in each quarter up to January 1, 2022. 

Who is eligible?  

An employer may be eligible for an ERTC if the business was fully or partially suspended by a COVID-19 related government order, or: 

  • If in 2020 gross receipts fell by 50% or more versus the comparable quarter in 2019. If an employer’s gross receipts rose above 80% versus a comparable quarter in 2019, it did not qualify for an ERTC for that quarter. 
  • If in 2021 gross receipts for the current or preceding quarter are below 80% of the comparable quarter in 2019. When an employer’s gross receipts go above 80% of the comparable quarter, it will not qualify for an ERTC in the next quarter. 

Eligible employers may include those that also took out forgivable PPP loans, but borrowers cannot claim an ERTC for the same payroll costs used to qualify for PPP loan forgiveness. 

How do you calculate your credit?  

For 2021, eligible employers may claim a refundable tax credit against what they pay in Social Security tax on the qualified wages paid in an eligible quarter between Jan. 1 and Dec. 31, 2021. The credit is capped at 70% of $10,000 in qualified wages paid per employee per quarter (or $7,000) for up to four qualifying quarters.  

Helpful resources 

  • The National Restaurant Association published this page with examples of how the ERTC can be used.  
  • You will need to prove that your business was affected by a government order to qualify. This timeline shows Washington state shutdown orders until July 2021. 

The IRS offers the following guidance that has been updated to reflect the changes made by multiple federal relief acts.   

Employee Retention Credit – 2020 vs 2021 Comparison Chart | Internal Revenue Service (irs.gov)

Work Opportunity Tax Credits (WOTC) 

Current status 

The Work Opportunity Tax Credit (WOTC) gives employers a tax break for hiring certain hard-to-place job seekers. The WOTC is not a new incentive (the federal program was created in 1996), but the current job climate makes the program especially relevant.  

Individuals who have been unemployed for at least 27 weeks are eligible for the credit. You may qualify for this federal tax incentive by hiring military veterans, public assistance recipients that qualify for SNAP (food stamps) or Temporary Assistance for Needy Families (TANF) requirements, and formerly incarcerated individuals.  

How to apply  

Employers or their representatives must submit applications within 28 days of the job start date. You can apply for the credits online and will need your SecureAccess Washington (SAW) account. You will also need a WOTC account, which can be created by navigating from eServices to the WOTC sign-in page and selecting “new employer” or “new representative.”   

Resources 

This article talks more about eligibility and incentive amounts.  

The Washington State Employment Security Department has more information here.  

Paid Family and Medical Leave 

Current status 

The federal Emergency Paid Sick Leave Act that provided relief to employers expired on Dec. 31, 2020, but Washington state has grants available for small businesses. 

Small business assistance grants provide small employers (150 or fewer employees) with grant money to help cover costs associated with an employee taking Paid Family and Medical Leave. 

There are grants of up to $3,000 for employers who added an employee to their payroll temporarily to replace an existing employee on leave, and grants (of up to $1,000) that help cover other wage related costs or equipment purchases. 

Employers are allowed to apply for one grant per employee on leave up to 10 grants each year. 

How to apply 

Log-in to your Paid Leave employer account and click “More” on the top ribbon. Then navigate to the business assistance grant information and application page. 

Resources 

The ESD website explains the grants and goes over the eligibility requirements here. This page also has a toolkit for employers that talks about 2022 requirements, the required poster for employers and the 2022 paycheck insert you may have noticed. This page will also break down premiums for most employers. 

This federal page has the most recent information about paid leave as it relates to the pandemic.  

 

Small Business flex fund 

Current status 

Small businesses that experienced economic hardship due to the pandemic can still apply for the Washington State Department of Commerce Small Business Flex Fund. Businesses must have fewer than 50 employees and annual revenues of less than $3 million, and can borrow up to $150 million. There are 60- and 72-month loan options, but you will have to apply in 2021 to receive the 72-month loan term.  

How to apply 

You can learn more about the fund here and start the application on the fund’s website here. 

 

 

Programs no longer accepting applicants 

Shuttered Venue Operators Grant (SVOG) 

The Shuttered Venue Operators (SVOG) includes over $16 billion in grants to eligible businesses such as live venue operators or promoters, theater operators and some museums and zoos. The SBA stopped taking new applicants on August 20, 2021.  

What now? If you are an active applicant or awardee, you can still access the portal that you used to apply. Log in to your account here.   

Paycheck Protection Program (PPP) 

Current status: The SBA stopped taking applications for the Paycheck Protection Program (PPP) in May of 2021, but applicants have 10 months after the end of their covered loan period to apply for forgiveness.  

How to apply for forgiveness 

Restaurant Revitalization Fund (RRF) 

Current status 

The SBA closed the Restaurant Revitalization Fund (RRF) after receiving more than 362,000 applications. While the RRF is officially closed, multiple bills to replenish the fund by up to $60 billion are being debated in Congress right now.  

Your stories are critical to getting additional RRF funding approved by Congress! If you were approved for RRF but didn’t receive grant funds, please reach out to the Washington Hospitality Association’s Grassroots Coordinator Jordan Caron at jordanc@wahospitality.org to share your story.  

You can also tell Congress to act now and replenish the fund here.  

Resources for technical questions 

SBA call-center support: (open 8 a.m. – 8 p.m. EST Mon-Fri): 1-844-279-8898 

Members: should contact their territory manager for assistance or email communications@wahospitality.org. 

SBA Seattle District Office: 206-553-7310 
Spokane: 509-353-2800  

 

Other closed Washington state relief programs