We know the last few weeks have been challenging. People and businesses across every industry have been impacted in some way by the difficult market conditions caused by both COVID-19 and instability in the oil and gas markets. At RigUp, our mission has always been to empower the people who power the world. That’s why we’ve created this guide to help you navigate the resources that may be available to you. We’ll continue to keep you updated on changes to this program or similar programs that might benefit you and your family.
Support for Individuals & Families
1) Tax Delay:
Tax filing day has been delayed from April 15 to July 15. Because of the challenges these economic conditions have created for many Americans, the federal government is extending the tax filing deadline to July 15. This primarily benefits those who may owe taxes, giving them additional time to file, both interest and penalty free. If you expect to receive a refund from the IRS, you can still file your taxes and receive your return as you normally would.
More Info at: https://www.irs.gov/coronavirus
2) Checks from the Government:
Some Americans will qualify for a one-time relief payment from the federal government, expected to be paid in the coming weeks. Beneficiaries can receive up to $1,200 per person or $2,400 for married couples, as well as $500 per child. You will not need to pay income taxes on the payment. The payments will decrease for individuals earning over $75,000 or married couples over $150,000, with individuals earning over $99,000 or married couples over $198,000 getting nothing. The IRS will use your 2018 tax return (or 2019 tax return if you have already filed it) to determine your income. There is nothing you need to do to receive this money. The IRS will either mail you a check, or direct deposit the money if it has your account information. We expect the money will start being distributed in about three weeks.
Image Source: Bloomberg
More info at: https://www.irs.gov/coronavirus
3) Additional Unemployment Benefits:
The federal government has made some temporary changes to unemployment insurance programs, increasing the number of people who qualify, how long they can receive benefits, and how much they can receive. First, the federal government is adding $600 per week for up to four months on top of what beneficiaries normally would receive from their state. These additional funds ended on 7/25; however, those who qualify for retroactive payments of the $600 for eligible weeks between 3/29 and 7/25 will still receive those payments. (We’ll keep you updated as discussions around additional stimulus evolve).
Second, independent contractors and self-employed workers who are not eligible for regular state unemployment benefits can now receive up to 39 weeks of unemployment benefits. To qualify, you must certify you are unemployed, partially unemployed or cannot work for reasons related to the coronavirus. You cannot receive this assistance if you are receiving paid leave or are undocumented. Contractors can apply for the benefits and receive payments retroactively to January 27, 2020. The program ends December 31, 2020 for new claims.
The U.S. Department of Labor has confirmed independent contractors’ eligibility for coverage under the Pandemic Unemployment Assistance Program, even if contractors are seeing reduced demand for their services but are not completely out of work. You can read more about that eligibility here.
For workers in Texas, the Texas Workforce Commission (TWC) has given additional guidance for self-employed, contract, and gig workers who have lost work due to COVID-19. These workers should apply for Pandemic Unemployment Assistance (PUA) using Unemployment Benefit Services (UBS).
When selecting a reason for job separation, these workers should select “reduced hours.” If the reduced hours are a result of COVID-19, these workers should select “COVID-19” under the disaster impact section. Complete all questions on the form to submit your claim.
The system will first review the claim for regular unemployment insurance eligibility, which will result in a denial. TWC will then automatically enroll these applicants in PUA.
Finally, self-employed individuals can also defer payments on the employer share of the Social Security tax, to be paid out over the next two years in 50 percent increments.
Learn more here:
4) Paid Sick Leave:
Refundable tax credits are now available for independent contractors who would have received coronavirus-related paid leave if you had been an employee. The tax credits are equal to 100 percent of a qualified sick leave equivalent if you are sick, or 67 percent if you are caring for others due to COVID-19. The per-day amount is limited to the lesser of your average daily self-employment income, or $511 per day if caring for yourself or $200 if caring for a minor child. The number of eligible days is limited to 10 if related to sick leave and 50 if related to family leave. We expect the IRS will post more information on these credits, including information on how to claim them.
Learn more here: https://www.dol.gov/agencies/whd/pandemic/ffcra-questions
5) Student Loans:
All borrowers with federally held student loans from the last 10 years can put off paying their federal student loan payments without penalty until September 30. You can also suspend the collection of defaulted student loan debts — including wage and tax refund garnishment. The deferral program will not apply to private loans or some federally guaranteed loans. Visit StudentAid.gov/coronavirus for forthcoming details, including how to suspend your payments.
Within a few weeks, you should receive a notice telling you the status of your federal loans. After August 1, 2020, you will receive notices reminding you about the end of the deferral period.
6) Retirement Plan Distributions
Investors of any age can withdraw up to $100,000 from retirement accounts for coronavirus related expenses without paying an early withdrawal penalty. You can avoid taxes on the withdrawal if the money is put back in the account within three years. If it can’t be returned, taxes can be paid over three years.
More info at: irs.gov/coronavirus
Support for Businesses
1) Tax Delay:
Tax filing day has been delayed from April 15 to July 15. The tax delay is applicable to businesses as well, giving them additional time to file both interest and penalty free. If you expect to receive a refund from the IRS, you can still file your taxes and receive your return as you normally would.
More Info at: https://www.irs.gov/coronavirus
2) Small Business Loans
Paycheck Protection Program
The Paycheck Protection Program is available to businesses with 500 or fewer employees, sole proprietors, independent contractors, and other self-employed persons. The loans provide 8 weeks of cash flow assistance through 100% federally guaranteed loans, and the money can be used for payroll, health care benefits, rent, mortgage interest payments, utilities, and interest on other debt obligations incurred before February 15, 2020.
The amount of the loan can total up to 2.5 times monthly payroll costs with a cap of $10 million, and the interest rate cannot exceed 4%. Borrowers can also request loan forgiveness for an amount equal to payroll costs, rent obligations, and utility payments paid during the eight weeks after the loan date. The amount of the loan forgiveness is reduced for layoffs and certain wage reductions.
Some may qualify for Paycheck Protection Program Loan Forgiveness. You can read more on that program here.
Economic Injury Disaster Loans
Businesses can apply for a maximum of $2 million at a rate of 3.75%. The length of the loan and payment schedule are determined case-by-case, based on the ability to repay. The SBA will evaluate loans primarily based on credit scores, and applicants must be able to show economic harm. Businesses with fewer than 500 employees can ask the SBA for a $10,000 advance within three days after submitting their EIDL application. Applicants will be allowed to keep the money even if their EIDL application is denied.
So you can quickly reference this information in the future, we’ve created a downloadable fact sheet to summarize the benefits that may be available to you.
If you have additional questions about how RigUp can support you, please reach out to GR@rigup.com
THE INFORMATION IN THIS MEMO SHOULD NOT BE CONSTRUED AS LEGAL ADVICE OR LEGAL OPINION. THIS MEMO PROVIDES NO LEGAL OR COMPLIANCE ADVICE. COMPANIES SHOULD CONSULT WITH COUNSEL TO ENSURE FULL COMPLIANCE WITH ALL LEGAL REQUIREMENTS