UPDATE Regarding Unemployment Insurance.
At a virtual Town Hall on April 7th, the Vermont Department of Labor informed attendees that the in-house platform to accept applications and administer the CARES Act benefits was under development. Based on the criteria established by US Department Labor, Vermont officials believed almost all self-employed and independent contractors would be eligible for the expanded pandemic unemployment insurance compensation program. As more information becomes available, it will be posted at this VTDOL page. For those who have already have applied, and received notifications of being ineligible, that information will hopefully be transferred to the platform within a week to two weeks. Applicants are advised to sign-up for updates.
As a result of the COVID-19 virus, including the recommendations and the measures taken by government to close schools urging work at home, social distancing and the banning of service at bars and restaurants, almost all businesses will suffer economic consequences. Below are summaries and links to important information to help businesses and employees. Please visit this page at least twice a week since Government Agencies may change rules, forms, instructions and web sites.
It is important to note that self-employed individuals are eligible to file for unemployment benefits if they are not working as a result of the coronavirus. Additionally, sole propriertors and independent contractors can appy directly for SBA Economic Injury Disaster Loans described below.
For clarification, the PPP program below, only specified tax exempt non-profits can apply including all that are organized 501 (c) (3). For SBA EIDL loans any non-profit organized as tax exempt under 501 (c) (d) or (e) can apply,
It's likely that many of the many measures to protect the public and employees will remain in place for many months with some easing for work and exposure that is classified as lower risk. The U.S. Dept of Labor's Occupation and Health Administration (OSHA) has issued a workplace Guidance Document and employers may find OSHA's Covid-19 web page useful whenever it's time call employees back to work.
The link above is a fact sheet issued by the US Dept. of Treasury for an SBA forgiveable loan program based on retaining paid employees. The program is a loan but if payroll is retained, 8 weeks of payroll expenses and other specified operating expenses will be be forgiven upon request of the Borrower to the Lender. More information is provided by SBA HERE. A proposed loan application is also available,for downloading All applications must be made through an approved SBA Lender. In Barre, they are Community National Bank, Northfield Savings Bank, Peoples United Bank, Citizen's Bank, N.A., Keybank. N.A., TD Bank, N.A. and North Country Federal Credit Union. SBA will reportedly start accepting applications from lenders on Friday, April 3rd and from small businesses and sole proprietors and commencing on April 10th from independent contractors and self-employed individuals. To assist in calculating loan request amounts, and amounts that can be forgiven, a 2 tab spreadsheet can be downloaded from BADC.
SBA is now accepting Disaster Assistance Loan Applications that can be found at the link above, and can be uploaded from the same web page. Mailing instructions are at the bottom of the SBA page. The federal legislation passed on March 27th, includes the opportunity to receive up to a $10,000 Advance on an Economic Injury Disaster Loan (EIDL), see below, for emergency capital. BADC has downloaded all of the forms and anyone who problem in obtaining them from SBA, they can contact firstname.lastname@example.org or call 476-0660.
Additional clarification for this federal Act is described in the link above. In addition to the deferral of returns and any taxes due until July 15th, this announced program is law but not truly in effect until the final rules are adopted. In addition to the deferral to tax returns and payments, businesses and non-profit entities can provide up to 80 hours of paid leave to employees who qualfiy under the federal Act resulting from COVID-19 virus and be reimbursed fully up to $511 per day for 10 days for each employee. Employers should take note that it has been widely reported that the U.S. Department of Labor has ruled that broad government Executive Orders to stay at home do not qualify employees for paid leave under the Act. Additionally, money set aside to payroll taxes for all employees, both the employer and employee set aside of federal taxes can be used to make payments to employees. Available funds spent over above what is set aside will be reimbursed. Those details are provided in the link, and the form and draft instructions to claim the credit are now available for review.
The State of Vermont's Tax Department is deferring income tax returns until July 15h and will not charge penalties and interest for meal, rooms and sales taxes that are not made when due on March 25th or April 25th.
The U.S. Small Business Administration has announced changes to help borrowers still paying back SBA loans from previous disasters. Deferments through December 31, 2020 will now be automatic, so borrowers of home and business disaster loans do not have to contact SBA to request deferment.
SBA’s Economic Injury Disaster Loans (EIDL) offer up to $2 million in assistance per business, providing economic support to overcome temporary loss of revenue. EIDLs may be used for working capital to make-u for lost revenue, payroll, accounts payable and other bills that can’t be paid because of the disaster’s impact. To get started, a tutorial can be downloaded. The interest rate is 3.75% for small businesses and 2.75% for private non-profit organizations, which are also eligible for EIDLs.
For small businesses, small agricultural cooperatives, small businesses engaged in aquaculture and most private nonprofit organizations, the SBA offers EIDLs to help meet working capital needs caused by the disaster. EIDL assistance is available regardless of whether the business suffered any physical property damage.
SBA offers loans with long-term repayments in order to keep payments affordable, up to a maximum of 30 years. Terms are determined on a case-by-case basis, based upon each borrower’s ability to repay. Small businesses with credit available elsewhere may not be eligible.
To apply online, visit https://covid19relief.sba.gov/#/ Documents that may be requested when applying include recent federal tax return, profit-and-loss statement and balance sheet.
The State of Vermont's COVID-19 web site with latest developments.
BADC urges businesses and their employees get prepared to provide information as necessary to receive assistance. Below are some recommenations.
- Gather 2018 and 2019 tax returns, paper and digital versions, to document previous income and expenses frrom prior years. Owners of businesses who rely on the salaries, wages or profits of the businesses for themselves should also have their personal returns readily available.
- Put together a list of all fixed costs that have to be paid going forward: utility bills, insurance, rents, taxes that are not deferred, and payments to creditors and banks.
- Payroll records to confirm the identity and wages of employees.
- Preparing comparative statements of income and expenses from previous year to now. For example, matching March 2019 figures to whatever is known from the beginning of this March to whenever an application if filed with a government entity for help.
For former Employees laid-off or with reduced wages:
- Gather W-2 tax statements from 2019 and two recent pay stubs that reflect the highest income earned so far in 2020.
- Make a list of all living expenses: rents, food, utilities, transportation, debt payments, child care, child support, student loans, health insurance and anything else.
- File for unemployment benefits. Download a guide to getting started: https://uipublic01.labor.vermont.gov/Claimantportal/GuideToFiling.pdf
Some assistance may be funneled through Vermont state government. Chances are that for many the help cannot come fast enough, but being prepared will help expedite any benefits that are available..