Economic Impact Payments

 

Background: On December 27, President Trump signed legislation providing emergency financial relief for Americans during the pandemic. In part, this legislation provides a direct payment to most Americans. If you’ve filed a tax return in recent years, are a disabled veteran, or a Social Security or disability beneficiary, you are likely eligible for a payment. The Treasury Department has already begun sending out direct deposits, checks, and debit cards to eligible individuals.

Eligibility: All U.S. residents are eligible as long as they have a work-eligible Social Security Number and meet certain income requirements. Individuals whose income is entirely from non-taxable, means-tested programs—such as Supplemental Security Income benefits—are eligible as well. 

Click here to calculate how much assistance you will receive


For Individual Filers: Americans who file their taxes as individuals will receive up to $600 in assistance. If your income was less than $75,000 in 2019, you will receive the full amount of $600. Reduced checks on a sliding scale will be paid to individuals making over $75,000. For every $100 you make over $75,000, your assistance will be reduced by $5.

For Married Couples Filing Jointly: Americans who file taxes jointly will receive up to $1,200 plus $600 for every dependent under the age of 17. If your joint income was less than $150,000 in 2019, you will receive the full amount of $1,200 plus $600 for every dependent under 17.  Reduced checks on a sliding scale will be paid to couples making over $150,000,. For every $100 you make over $150,000, your assistance will be reduced by $5.

For Heads of Household: Americans who file taxes as heads of household will receive up to $600 plus $600 for every dependent under the age of 17. If your income was less than $112,500 in 2019, you will receive the full amount of $600 plus $600 for every dependent under 17.  Reduced checks on a sliding scale will be paid to those making above $112,500,. For every $100 you make over $112,500, your assistance will be reduced by $5.

 

Past-Due Debts: Payments are protected from federal debt collection, bank garnishment, or levy by private creditors or debt collectors.

Common Questions and Answers

 

How will I receive my financial relief?

In most cases, no action will be required in order to receive your payment. The federal government will disburse payment either through direct deposit, debit card, or check, depending on what information you have on file.

 

When will I receive my financial relief?

 Turnaround time will vary by individual/family unit, but the Treasury Department has already begun distribution of direct deposits, debit cards, and checks.

 

Does my income impact my tax rebate check?

Yes, the credit phases out at a rate of $5 per $100 of additional income, starting at $75,000 for individuals. This phase-out rate begins at $112,500 for heads of household and $150,000 for married couples filing jointly.

 

What tax year will be used to determine my income?

Your 2019 income will be used to determine your eligibility.

 

Do I need a Social Security Number to receive payment?

In general, taxpayers without an eligible Social Security Number are ineligible for payment. However, married couples filing jointly, in which one spouse has a Social Security Number and one does not, are eligible for a payment of $600, in addition to $600 per child with Social Security Number.  

 

What about Social Security beneficiaries?

The Treasury Department will issue payments for Social Security Old-Age, Survivors, and Disability Insurance (OASDI) beneficiaries, Supplemental Security Income recipients, Railroad Retirement Board beneficiaries, and Veterans Administration beneficiaries based on information provided by the Social Security Administration, the Railroad Retirement Board, and the Veterans Administration, respectively.

 

Do I have to pay taxes on these payments?

No.

 

Do I need to have income to be eligible for payment?

No.

Am I eligible for payments if I’m classified as a dependent?

Individuals claimed as dependents are not eligible for payments. The individual or couple who claims a dependent on their tax return is eligible for $600 per dependent under 17.  

 

I am in debt, can this money be garnished or seized?

Payments are not subject to administrative offset for past due federal or state debts. Additionally, payments are protected from bank garnishment or levy by private creditors or debt collectors.

 

Will people receive a paper check or a debit card?

For those who don’t receive a direct deposit by early January, they should watch their mail for either a paper check or a debit card. To speed delivery of the payments, the Bureau of the Fiscal Service, part of the Treasury Department, will be sending a limited number of payments out by debit card. Please note that the form of payment for the second mailed EIP may be different than for the first mailed EIP. Some people who received a paper check last time might receive a debit card this time, and some people who received a debit card last time may receive a paper check. IRS and Treasury urge eligible people who don’t receive a direct deposit to watch their mail carefully during this period for a check or an Economic Impact Payment card.


  

Federal Unemployment Insurance Benefits

 

Background: On December 27, President Trump signed legislation providing emergency relief for Americans to help meet their financial needs during the pandemic. In part, this legislation provides assistance for the unemployed by adding 11 weeks to unemployment eligibility and providing an additional $300 per week in federal benefits for the unemployed.

Eligibility: To be eligible, an individual needs to be unemployed, self-employed, or an independent contractor who has lost work.

Who to contact: If you are an Arkansan who believes you qualify for assistance under this program extension, please contact the Arkansas Department of Workforce Services. Their website is https://www.dws.arkansas.gov/employers/ar-claim-help/ and their phone number is 501-682-2121.

 

Details:

·      This legislation extends unemployment benefits for individuals who stand to lose unemployment benefits at the end of 2020. Unemployed Arkansans are eligible for an additional $300 per week in federal aid in addition to their normal unemployment benefits.

·      Provides unemployed individuals an additional $300 per week for 11 weeks from December 26, 2020 - March 14, 2021. However individuals who have not met the maximum week limit are eligible for the federal $300/week payment though April 5, 2021. April 5th 2021 is when the federal benefits will end.

·      Extends all other Unemployment Insurance (UI) provisions to March 14, 2021, including interest-free loans to states to keep their unemployment-insurance trust funds in shape, flexible staffing for states, and UI relief for non-profit organizations.

·      Adds program-integrity provisions to require documentation of earnings and employment (versus self-certification). It also requires states to have processes for verifying applicants’ identities, to combat fraud and abuse in unemployment programs.

·      Includes return to work reporting requirements for states to have a place for employers to report when someone turns down a job and to notify claimants of the requirement to accept suitable work, unless there is good cause for refusal.

  

Information on Filing for Unemployment Insurance Benefits

Online Unemployment Insurance Applications:

·       EZARC Site: https://www.ezarc.adws.arkansas.gov/ (To file initial/new unemployment applications)

·       ArkNet site: https://www.arknet.arkansas.gov/ or call using ArkLine 1-501-907-2590 (To file continued/weekly regular unemployment claims)

Scheduled hours of operation for EZARC site are: 6:00AM - 6:00PM on all days.

Scheduled hours of operation for ArkNet and ArkLine are: Monday – Friday, 6:00AM - 6:00PM and Sunday, 12:01 AM - 6:00 PM

PUA Site: https://pua.arkansas.gov/home
(To File Initial and Weekly Claims for PUA Benefits)

Scheduled hours of operation for PUA site: 6:00AM – 6:00PM on all days.

Hotline: 1-844-908-2178

Your call will be directed for regular unemployment insurance or PUA based on the information you provide on the call

Scheduled hours of operation:

Regular UI calls: Monday – Friday, 7:30AM – 4:30PM PUA calls: Sunday – Friday, 6:00AM – 6:00PM

Paper Form Applications:

·       UI application for benefits: https://www.dws.arkansas.gov/src/files/PDF501_BLANK_v022020.pdf

·       All claimant forms can be found here: https://www.dws.arkansas.gov/unemployment/ui- claimant-forms/

·       Arkansas Workforce Center locations can be found here: https://www.dws.arkansas.gov/contact/

Local offices are open Monday – Friday, 8:00AM – 4:30PM


Note: If you have attempted to access
the online unemployment claims filing systems and call the UI Hotline but have experienced delays or other issues due to the increased volume of users, you may fill out a paper form. If you have access to a printer, you may print off the application and take it to your local Arkansas Workforce Center. Though in-person visits are discouraged, print applications are also available for pick-up at the Arkansas Workforce Centers across the state.

General Unemployment Insurance Inquiries:

Phone: 1-844-908-2178

UI.General.Questions@arkansas.gov - This email address SHOULD NOT be used to file a claim.

ADWS Information Desk: 1-855-225-4440 or 501-682-2121

 

Frequently Asked Questions


Where do I apply for unemployment?

Arkansans can apply for unemployment at the Arkansas Department of Workforce Services. Their website is https://www.dws.arkansas.gov/employers/ar-claim-help/ and their phone number is 501-682-2121.

 

When will the $300 bonus weekly unemployment checks restart?

The weekly bonus will start December 26, 2020, and last until March 14, 2021. This 11-week extension also has an overflow period that lasts until April 5, 2021. This means a person who finds themselves unemployed in early 2021 will receive an additional three weeks of aid. All additional federal benefits will end on April 5, 2021 and return to the previous unemployment insurance system.

 

Would the $300 weekly federal unemployment benefit be retroactive?

The $300 additional weekly benefit will only be available for the week of December 26, 2020 and going forward.  

 

How are the unemployment benefits calculated?

The Arkansas Division of Workforce Services determines the amount of unemployment insurance each Arkansan receives based on their gross income. The $300 federal weekly benefit is added on top of that sum. The average in Arkansas is $220 per week, making the average weekly benefit under this program $550 per week.

 

Do I qualify for unemployment benefits?

A general rule is that you should apply if you've lost your job or been furloughed through no fault of your own. This would include a job lost directly or indirectly because of the pandemic. Additionally, if you are self-employed or an independent contractor experiencing job loss, you may be eligible. Arkansans can contact the Arkansas Division of Workforce Services to determine eligibility. Their website is https://www.dws.arkansas.gov/employers/ar-claim-help/ and their phone number is 501-682-2121.



Paycheck Protection Program Round 2


Background:
On December 27, President Trump signed legislation providing emergency financial relief for Americans during the pandemic. Part of that legislative package included a second round of Paycheck Protection Program (PPP) funds that will allow eligible small businesses and nonprofits to apply for forgivable loans. These funds can be used to keep employees on payroll and provide money for eligible expenses.

Interested Borrowers/Lenders: If you are a potential borrower interested in participating in the Paycheck Protection Program, you should contact your financial institution and ask if they are a Small Business Administration approved lender or if they intend to participate in the Paycheck Protection Program. If so, they can help assist you through this process. If you would like to find an approved SBA lender or if you are a financial institution interested in participating in the program, you can contact the Small Business Administration Arkansas District Office at (501) 324-7379.

Borrower Eligibility: The bill defines eligibility for loans as small businesses, nonprofit organizations classified as a 501(c)(3) or 501(c)(6) that meets certain conditions, housing cooperatives, veterans organizations, Tribal businesses, self-employed individuals, sole proprietors, independent contractors, small agricultural cooperatives, as well as certain small news organizations. Businesses primarily engaged in advocacy or lobbying activities are ineligible. Businesses organized in China or Hong Kong or with a 20% or greater ownership stake by individuals in China or Hong Kong are ineligible.

Lender Eligibility: This legislation provides authority to all current SBA 7(a) lenders who make these loans to small businesses. It also provides that same authority to lenders who join the program and make these loans. The SBA Administrator and the Treasury Secretary can authorize additional lenders they deem to have the necessary qualifications to process, close, disburse, and service these loans.

Eligible Expenses:

·      Payroll.

·      Utilities (gas, electricity, water, telephone, internet).

·      Rent (real and personal property).

·      Mortgage interest.

·      PPE expenses: covered worker protection and facility modification expenditures, including personal protective equipment, to comply with COVID-19 federal health and safety guidelines.

·      Property damage: costs due to riots that occurred during 2020 that are not covered by insurance.

·      Supplier expenditures: pursuant to a contract, purchase order, or order for goods in effect prior to taking out the loan that are essential to the recipient’s operations at the time at which the expenditure was made. Supplier costs of perishable goods can be made before or during the life of the loan.

·      Operational payments: payments for software, cloud computing, and other human resources and accounting needs.

Size of Loans:

·      The loan amount for most businesses will be 2 ½ times their monthly payroll, determined by calendar year 2019 or the 1-year period before the date on which the loan is made. Businesses classified under accommodation and food service (NAICS code 72) will be eligible for loans up to 350% of their monthly payroll costs. Calculation is 2019 Payroll x 2.5 (or 3.5) divided by 12 (months) = maximum PPP loan

·      Eligible entities can select a covered period between 8 and 24 weeks to spend their PPP funds.

·      The maximum loan amount is $2 million.

·      Application deadline is March 31, 2021 (or until funding runs out).

Other Changes to the PPP:

·      Simplified forgiveness: This legislation simplifies the forgiveness application process for PPP loans of $150,000 or less.

·      EIDL grant/PPP fix: This legislation repeals the requirement of deducting the EIDL Advance Grant ($1,000/employee) from the PPP forgiveness amount.

·      Deduct forgiven expenses: Deductions are now allowed for expenses paid with proceeds of a forgiven PPP loan (and forgiven PPP loans not treated as taxable income).

Frequently Asked Questions

Who is eligible for a second PPP loan?

Small businesses, some nonprofit organizations, self-employed workers and independent contractors are among those eligible, provided they have 300 employees or less and can demonstrate they experienced a 25% reduction in gross receipts during a quarter in 2020 compared with the same quarter in 2019. First-time PPP borrowers will be subject to the program’s original eligibility rules.

 

How much is a business eligible for?

The maximum for second-draw loans is $2 million. Second-time PPP borrowers will generally be eligible to borrow an amount equal to 2½ times their average monthly payroll costs. A notable exception: Applicants in the accommodation and food services industries, as designated by the Small Business Administration, are eligible for loans that amount to 3½ times their average monthly payroll.

 

What are the forgiveness requirements?

 Borrowers are required to spend at least 60% of the funds on payroll to receive full forgiveness. The other 40% may be used on eligible costs. These costs include certain mortgage expenses, rent and utility payments. The bill expands forgivable expenses to include expenditures for personal protective equipment and other gear to protect workers; supplier costs; operations expenditures, such as software; and property damage costs due to public disturbances during 2020.

 

What can you include in calculating PPP loan amount?

Payroll costs consist of employee compensation (whose principal place of residence is the United States) in the form of salary, wages, commissions, or similar compensation; cash tips or the equivalent (based on employer records of past tips or, in the absence of such records, a reasonable, good-faith employer estimate of such tips); payment for vacation, parental, family, medical, or sick leave; allowance for separation or dismissal; payment for the provision of employee benefits consisting of group health care coverage, including insurance premiums, and retirement; payment of state and local taxes assessed on compensation of employees.

Owner-employee compensation replacement (if not a W-2 employee which would be included in above) is based on 2019 Schedule C net profits, line 31. Divide that number by 12 and multiply that number by 2.5 which is 10 weeks worth of net profits for 2019.

 

Non-employer PPP loans are calculated solely from 2019 Schedule C (or Schedule F) net profits (as above). The maximum loan amount for non-employer borrowers is $20,833.

 

Where do I apply?

PPP loans are backed by the SBA but issued by financial institutions, such as banks, credit unions, fintech companies, and community lenders. Interested businesses should call their financial institution to see if they are participating. SBA figures show 5,460 lenders were participating when PPP closed in August.

 

When will the program reopen?

The bill requires the SBA to establish regulations on small-business support no later than 10 days after the legislation is signed into law. That would mean the program should be operational by the second week in January.

 

Will I be able to deduct money from PPP on my taxes when used for eligible expenses?

Yes, the bill changed IRS rules to allow for money received through PPP to qualify for tax deductions.

 

How is the loan forgiven?

Eligible entitites will submit forgiveness applications through their financial institutions once the covered period for their loan has expired. The bill provides a simplified forgiveness process for PPP loans under $150,000. Borrowers in this category will need to complete a one-page certification attesting they complied with program requirements, along with providing other information.

 

How is the 25% reduction in revenues calculated?

Business owners will compare gross receipts of the business before expenses are subtracted. They will compare those for any quarter in 2020 to the same quarter in 2019 to determine if revenues decreased by at least 25%. 

 

What if you weren’t in business all of 2019?

 A business must have been in operation by Feb. 15, 2020 to be eligible.

If you were not in business during the first or second quarter of 2019 but you were in business in the third and fourth quarter of 2019, then you may compare any quarter in 2020 with the third or fourth quarter of 2019 to determine whether gross receipts were reduced by at least 25%. 

 

If you were not in business during the first, second, or third quarter of 2019, but you were in business in the fourth quarter of 2019, then you may compare any quarter in 2020 with the fourth quarter of 2019 to determine whether gross receipts were reduced by at least 25%. 

A business that wasn’t in business in 2019 but was in business before February 15, 2020 will compare gross receipts from the second, third or fourth quarter of 2020 to that first quarter of 2020 to determine whether gross receipts were reduced by at least 25%. 

 

Reminder the first quarter runs January 1 – March 31, the second quarter runs from April 1 – June 30, the third quarter runs from July 1- Sept 30, and the fourth quarter runs from October 1 – December 31st. 

 

What other forms of small-business aid are available?

 

·      Live Venue Grants: The legislation provides $15 billion for the SBA to make grants to live venue operators, such as theaters and live performing arts organizations.

·      EIDL Loans: This legislation also provides $20 billion for advance grants for applicants to the SBA’s economic-injury disaster loan program. Small businesses and nonprofits in low-income communities that received these grants and any small business or nonprofit that received an EIDL advance previously are eligible to receive the full $10,000 if their award was less than $10,000 in the first round of grants.

·      SBA 7(a) Loans: The bill extends a provision that pays the principal and interest on behalf of borrowers that have certain SBA loans, such as 7(a) loans, the agency’s flagship loan offering. It also provides support for the 7(a) program by increasing the amount of the SBA’s guarantee for lenders.

·      Employee Retention Tax Credit: The bill extends the Employee Retention Tax Credit to July 1, 2021 and increases the fully refundable portion of qualified wages from 50% to 70%. Employers are now able to participate in both the Employee Retention Tax Credit and in the PPP.

·      Extension of Paid Leave Credits: The bill extends refundable payroll tax credits through March 31, 2021. These credits are no longer mandated, but but owners can still take advantage of the tax credit until March 31st. The bill also allows self-employed individuals to use their average daily self-employment income from 2019, rather than 2020, for purposes of computing these credits.

·      Pandemic Unemployment Assistance: Extends the Pandemic Unemployment Assistance (PUA) program, which provides continued unemployment assistance to the self-employed, freelancers, gig workers, part-time workers and other individuals in non-traditional employment. It also increases the number of weeks of PUA benefits an individual may claim, from 39 to 50.

·      Grants for Passenger Transportation: $2 billion in grants from the Department of the Treasury for passenger transportation services, including the bus, motor coach, and passenger vessel industry. 


 

Emergency Rental Assistance

 

Background: On December 27, President Trump signed legislation providing emergency financial relief for Americans during the pandemic. This legislation provides $25 billion in assistance for struggling renters through Treasury Department disbursements to U.S. territories, tribes, and cities. This legislation also extends the CDC eviction moratorium for an additional month, through January 31, 2021.

Distribution of funds: Arkansas, as with all states, will receive a minimum of $200 million through this program. Local jurisdictions with a population greater than 200,000 may also apply directly to the Treasury Department for additional emergency funding. Any amounts granted to local jurisdictions will be reduced from the total amount granted to the state.

Eligibility: An eligible household must meet all the following criteria:

1.     Qualifies for unemployment, or has experienced a reduction in household income, incurred significant costs, or experienced pandemic-related financial hardship.

2.     Demonstrates a risk of experiencing homelessness or housing instability.

3.     Has a household income at or below 80% of the area median.

Households deemed eligible may receive up to 12 months of assistance, plus an additional three months if necessary. Grantees have flexibility to devise additional eligibility criteria at their discretion. Grantees can only commit to assistance in three-month intervals, after which point an eligible household must re-apply for funds. Grantees may not make commitments for prospective rent payments to an eligible household unless assistance has also been provided to reduce that household’s overdue payments. 

Application prioritization: Grantees shall prioritize consideration of applications for eligible households that are at or below 50% of the area median income, or where one or more members of the household has been unemployed for 90 days or longer.

Applying for relief: Applications for rental assistance may be made directly to a grantee by either an eligible household or by a landlord on behalf of that eligible household. In general, grantees will provide funds directly to landlords and/or utility service providers. If a landlord does not wish to participate, the grantee may provide funds directly to eligible households. 


Arkansans who are interested in applying for rental assistance should contact their Arkansas Community Action Agency. Information for these agencies can be found here.