Dear Frankfort Chamber members,
Please note the following important updates on the Paycheck Protection Program and upcoming changes to unemployment benefits, including those for independent contractors.
Paycheck Protection Program
- The loan amounts will be forgiven as long as:
- The loan proceeds are used to cover payroll costs, and most mortgage interest, rent, and utility costs over the 8 week period after the loan is made; and
- Employee and compensation levels are maintained.
- Please note that good bookkeeping records are imperative to document your expenditures under this program to prove the money was used for covered payroll costs
- Speak with a financial advisor regarding this documentation and how this income will affect you in the long term
What counts as payroll costs?
- Salary, wages, commissions, or tips (capped at $100,000 on an annualized basis for each employee);
- Employee benefits including costs for vacation, parental, family, medical, or sick leave; allowance for separation or dismissal; payments required for the provisions of group health care benefits including insurance premiums; and payment of any retirement benefit;
- State and local taxes assessed on compensation; and
- For a sole proprietor or independent contractor: wages, commissions, income, or net earnings from self-employment, capped at $100,000 on an annualized basis for each employee.
When can I apply?
- Starting April 3, 2020, small businesses and sole proprietorships can apply for and receive loans to cover their payroll and other certain expenses through existing SBA lenders.
- Starting April 10, 2020, independent contractors and self-employed individuals can apply for and receive loans to cover their payroll and other certain expenses through existing SBA lenders.
- Other regulated lenders will be available to make these loans as soon as they are approved and enrolled in the program
Who can apply?
- All businesses – including nonprofits, veterans organizations, Tribal business concerns, sole proprietorships, self-employed individuals, and independent contractors – with 500 or fewer employees can apply.
- Businesses in certain industries can have more than 500 employees if they meet applicable SBA employee-based size standards for those industries (click HERE for additional detail).
What do I need to apply?
- You will need to complete the Paycheck Protection Program loan application and submit the application with the required documentation to an approved lender that is available to process your application by June 30, 2020.
- Click HERE for the application.
Where do I apply?
- The Small Business Administration (SBA) announced approved lenders for this program today.
- This list of lenders can be found HERE.
Further details regarding this program provided by the IRS
**Important updates to watch for with Unemployment Compensation**
Federal Pandemic Unemployment Compensation (FPUC) program
- Once this stimulus package has been implemented in Illinois, eligible individuals who are collecting certain UI benefits, including regular unemployment compensation, will receive an additional $600 in federal benefits per week for weeks of unemployment ending on or before July 31, 2020.
- This will not be retroactively applied to unemployment benefits received in the past.
Pandemic Emergency Unemployment Compensation (PEUC) program
- allows those who have exhausted benefits under regular unemployment compensation or other programs to receive up to 13 weeks of benefits
- Will be available for weeks of unemployment beginning after the date on which the state enters into an agreement with the Department and ending with weeks of unemployment ending on or before December 31, 2020.
Both of these benefits will be applied automatically if you qualify. Not everyone will be eligible for all the benefits contained in the package, and some benefits will not begin immediately. We will continue to keep you updated as these programs begin implementation.
New Unemployment Benefits for Independent Contractors & Sole Proprietors
Pandemic Unemployment Assistance (PUA)
- Under regular unemployment rules, the incomes of self-employed workers, freelancers, and independent contractors are not subject to unemployment taxes and so typically these individuals are not eligible for unemployment benefits.
- The stimulus package creates a new, temporary program to help people who lose this type of work as a direct result of the current public health emergency.
- This new temporary program can provide 39 weeks of unemployment benefits to individuals not eligible for regular unemployment, like independent contractors and sole-proprietors.
- These benefits are not immediately available as it will take time for IDES to implement this brand new program.
- Individuals who attempt to apply for PUA benefits before IDES has fully implemented the new program, will receive a denial letter.
- Further details about how to apply, and eligibility requirements will be made available as soon as they have been finalized.
- Information will be accessible at IDES.Illinois.gov once available
I hope you find this information helpful. Please continue to keep an eye for these emails that will provide you updated information and also look to our website
With best wishes for your safety and health,