New Stimulus Bill Breakdown with PPP and ERC Updates | Main Street Business Podcast |

Foreign.

Welcome, everyone, to the Main Street Business Podcast with Mark Kohler and Matt Sorenson. Today, we're talking about $1.9 trillion.

Do we really have to.

I'm using over and over.

You should milk it for all it's worth. How many times do you get to say $1.9 trillion? I mean, yeah, that's not often.

It's a big number, actually. Evil Industries revenue is now $100 trillion per year.

Oh, yes. So maybe you're going to get a piece of this money or you're just going to be paying it back for the rest of your lifetime. Well, we hope to let you know what to expect on the receiving end. On the payment end, who knows?

Yeah. Now, if you're new to this podcast, this is Tax and Legal podcast, talking about building wealth, saving taxes, protecting your assets, growing your retirement, all that stuff. Just pretty much how to live the American dream and how to get free

money from the government and how to get free money. Apparently, that's the new thing. This last year.

I feel like what everyone happens with stimulus every time it goes out. I don't know why. I picture, like, someone in, like, those cash boxes, you know, like those, like, old phone booths that, like, just blew cash, and you just had, like, grab it. That's what everybody is. When stimulus comes around, they're like. They jump in the cash. Like, I want to grab as much as I can, and then you got to get out.

Yeah. It's funny. One of those game shows. I like that. That's a good idea. That's what it does feel like. It is crazy. So welcome to the podcast. We try to keep this light, keep it informational. We've been. We're over 500 episodes now over the last 12 years, helping main street business owners. So hopefully we can make sense of this last bill, the one. I don't even know what they're gonna call it. They've got to be running out of names.

It's called the American Rescue Plan Act.

Oh, okay. There's Covid Relief one to rescue America.

Make it like there's like, the CARES act and then the Heroes act and all this.

Yeah, it's like, make it bad again, make it good again. Who knows? But we're even in. It's been a whirlwind this year. Okay, so the house down today. Let's get some dates down here, because we need to disclose this. Today is Tuesday, March 9th. Now, over the weekend, it was kind of a whirlwind. The house passed a bill, and then if you've ever remember this from government class in high school or college. It goes back to the Senate who they think they're the real smart people. They fiddle with it and then it goes. Then they actually fiddled with it and passed it, and then they send it back to the House and say pretty much take it or leave it. So it's expected that House will sign the Senate bill, their version, and President Biden should be signing it within the next 24 to 48 hours. So by the time you listen to this podcast, you've just spent another 1.9 trillion. Yeah. If you thought your budget was bad.

Yeah. So buckle up. We're gonna break down what's actually in it. There's a lot of things in it for individuals. We're going to talk about some of the things for small business to be aware of. And I'll just say this. There's a lot in there for individuals. There's a lot in there you're going to want to know for your taxes. Just. Every American should just know this stuff. Okay. You got kids. There's some cool things in there that could help you. I'm going to say for small business, one of the things they've done in this is they've done targeted stuff. And what targeted means is Congress kind of picked winners and losers here. And it's not like the first rounds of PPP or even IDLE and all that stuff where it was like any effective small business could come get it. It's much more targeted, which means it's going to be harder to get, but we're going to break it down. There'll be some of you that will get some perks out of this from the small business standpoint.

Yeah. And it almost looks like just to give some of you a visual representation of this, I like what the Wall Street Journal did to try to break this down is there. They build it like a little house, you know, like if you've ever seen house plans that a contractor will roll out on a table that are, you know, three feet wide and two feet, five feet long, whatever. I'm not a contractor, so I don't know. What are they, 3ft by 3ft? Whatever the dimensions are, they're pretty cool. AutoCAD. I know AutoCAD. They print them out on these big old printers that look cool. This 1.9 trillion is just split up on all these little rooms. And so I like how some got the family room a little more money, others got a little closet worth of money. And so the Wall Street Journal did this kind of fun little diagram that. That shows that. But it's almost interesting too, what's not in the bill. So let's get to it and maybe we should. I'm just throwing this out, calling an audible. Should we say what's not in the bill first?

Yeah, let's do that.

Then.

Let's. I agree. All right, you choose one here. I'll tell you what's not in the bill. Another round of ppp. There are some changes to PPP in the bill that makes some nonprofits and certain other people eligible to get PP funding, but there is no new PPP money out there. They did fund another hundred billion or so, but it's. You don't. There's nothing new to go get, basically, if you've already had PPP in the past, unless you're like a nonprofit or some business that didn't qualify because of nonprofit or like some. Some odd status qualification.

Yeah. And now we could take the rest of the show talking about PPP, because in the last eight days, I think it may be seven days, the SBA released a 55 page detailed summary with methods to get PPP. And it's now based on your gross revenue as a sole proprietor, not your net income. And there's all these new twists to the ppp. We will reserve that for another podcast to really dive deeper into the PPP options. But let me say this, you have until March 31st to apply. So we've got, like I said, we're here today with plenty of time in the rest of the month. March 9th, we've got three weeks left. We promise to hold another podcast dedicated to ppp because there's a lot of sole proprietors that weren't able to get much because they just had a business with a break even or a loss. And that's how a lot of little small sole props go. So there's no new money in this bill for it, but there's been a lot of legislation in the last week and a half. And if you've been wondering, yes, Matt and I have no life or our sleep is scattered in between reading legislation from the SBA or Congress. It's no fun, but we do it for you. We do it for you.

Yeah, that's how I fell asleep last night. So, yeah, I'm saving like ambient or something. I don't have to get a prescription.

Okay.

So Matt chose Dr. For a lightest stimulus bill.

Don't ask for an a.m. yeah, here's our prescription. No ambient. Here's a copy of the Stimulus bill.

Knock yourself out. That's kind of a holistic approach.

That's right.

For the holistic doctor.

Recognizing now, not very environmentally friendly. And here's a ream of paper. You only need to read one page, but I'll just give you the whole ream.

The electronic version. Yeah, yeah.

Okay. Now here's something else. Okay. You said ppp. There is nothing in here regarding the new minimum wage. So there's been a lot in the news of this $15 minimum wage hike that's supposed to be nationwide, federally imposed. Lots of debate and concerns over that. Nothing in this bill. So that's a bill for another day.

Yep. Yeah, the Senate stripped that out, and the House is expected to proceed with it, like we said today, without it. Here's one other one not in there. Student loan forgiveness, student debt.

That one's got.

That was one that's been pretty controversial. I think, like our generations, Mark, our generation is, like, kind of bent about that because we all had to pay our student loans back, you know, or maybe some of us still are. And now, now the next generation's like, wait, you know, we vote, so don't make us pay our student loans back. But that did not make it into the bill.

Yeah. So. And I think those are the biggies. So. No, there's no erc. No, that's employee retention tax credit money. There's no real new money on that. Just lots of clarification over the last few weeks. It's crazy. But no new money there. No new real PPP money. There is some. I guess we can get into the Eidl grant here in a minute, but nothing else really big in here that's been in the news that.

Do you want to just clear that off the table now? Let's just say what is in there for small business? And then we'll hit all the individual stuff.

Okay, let's do it. Okay. So what's in there for business? Matt, you know better. You were able to read this before you fell asleep last night.

So now I want this to. I don't want to sound, you know, partisan anyway. I mean, I hate both parties, so, you know, political parties. Which one do I hate more at any given time? But what they did for small business and, you know, from the Democratic, you know how they think is they wanted to target it to affected businesses. So the number one thing that's new in here for small business is targeted Eidl advances. Okay. And now this is. There's kind of inversion to this. In the last bill, these targeted Eidl advances. Now they are prioritizing who gets these targeted Eidl advances. These are, this is money that does not need to get repaid. What they put in this new bill is if you had a 50% decrease in revenue and you got to look at an eight week period in 2021 versus pre pandemic or sorry, or even 2020 versus pre pandemic in 2019. Take an eight week period if you had a 50% or more change in revenue and do you have 10 employees or less and are you in a low income community? Is your business in a low income community? If you meet those, you're prioritized first to get the original 10,000 that was authorized already under prior bills plus an additional five to a total of 15. That's an EIDL advance grant that you do not pay back. That is the first 14 days after the bill becomes law. The next 14 days are the same qualifications, 10 employees or less be in a low income community and have a 30% or more decrease in revenue from pre pandemic 2019, an eight week period versus something in 2020 or 2021. So this is very targeted because you have to have a significant decrease in revenue in either of these and you have to be in a low income community. And so now it's, there's a lot of controversy on this because well, what if I'm a business that's been affected by these revenue numbers? What does it matter if I'm in middle income, upper income? I mean I'm a business serving whatever community I'm in. But the approach here is to target this money to, for better or worse, to businesses that are operating in low income communities.

Okay, thank you, Matt.

Also I'll say that there are more grant money that was specifically allocated for restaurants. So let me say this. If you're in the restaurant industry, you own a restaurant, an event venue business where you're the business dependent on events occurring, those have specific grant programs and money available and you want to get a consultation on those. So there are specific, specific now dollars available in this new bill.

Yeah. And I think restaurant owners with their different associations and their, a lot of them with their networks, with their franchise groups, it's been a whirlwind for restaurants. I can't the, the strain and stress of the ups and downs of partial closures of dining rooms and how to handle all these different benefits.

Yeah. On the restaurants it's up to 10 million by the way, per eligible business. That's crazy.

That's crazy. Okay. So there we go. So we talked about what's not in the bill. First one was the small business and Matt said he was going to research that part. I'd like to jump over to this stimulus check. A lot of people are wondering where it's at now. They've reduced the eligible. Sorry, sorry. They've reduced the threshold of those that qualify to the point that 12 million fewer adults will get a stimulus check. So here's where it's at. If you're single, the check is $1,400. So let me just, let's do good news first. Fourteen hundred dollars checks should be going or auto deposit should be going out by the end of the month. And the government has until the end of the year to get the money out. People that are in weird situations or haven't filed, they have, they've got to get in line and get their money through some method or another. But the majority of everybody's going to see their money within the next six to eight weeks just like they did before, either in the mail or automatically deposited to the bank account. The threshold of when it phases out between 75,000 and $80,000 of annual income if you're single. So once you, it kind of phases out, but up until 75 grand, you get the whole $1,400. If you are head of household, it's a $112,500 and phases out at 120, $120,000. And if you're married filing joint, it's 150,000. The phase out begins and you completely are phased out at 160,000. Now those are pretty high numbers. I mean those are, you know, that's middle income America or less. Everybody, all those folks should be getting $1,400 checks. And notable changes that dependents of all ages stand to be eligible for the payments. So previous checks have only included those under age 17. So you may have dependents on your tax return that qualify as a dependent because they're going to college and you're providing X dollars of their support. Or maybe you're taking care of your mom in the household. If you just want to go through a brain teaser, go Google who is a dependent. That's like a whole week or two in accounting school. But if you do have a dependent on your tax return that's over age 17, they may even get the $1400 as well. So lots of money could be going out to help people make ends meet. There you go. Yeah, stimulus. Yeah.

They're going to be looking at your 19 or your 2020 return for these income limits and filing status. So you know, if you haven't filed 2020 and you've had a crappy year in 2020 where your income went down, you may qualify. Now you want to get that return in as opposed to relying on your 19. Now, they're not due yet till, of course, your 2020 returns until April 15th. But for this, if your income's down, get that sucker in. So, okay. Okay.

Your choice. Okay. Spin the wheel.

Spin the wheel. Let's talk about unemployment. Okay. All right. Okay. So unemployment. We have had different variations of this where the federal government has been adding on an additional unemployment benefit to whatever state unemployment you may already qualify for. So right now you're going to get a 300, excuse me, $300 federal increase on unemployment that goes on top of what you already qualify for your state unemployment. Now this is going to run through September of this year. So this is, this is a, the federal kicker, for lack of a better word, that was going for unemployment was going to expire here on March 14th. But this is going to extend it out all the way until September. Now, those on unemployment already, you're going to likely already get this. Those of you unfortunately may have to opt into it. Keep in mind, this goes on top of the weekly state amount you're going to get. So you're going to get to add on another $300 from the federal government. That used to be 400 bucks, by the way, that, that Biden was proposing, but at the end of the day it settled in at $300. This is per week, 1200amonth or you know, three, 300 a week that'll be added onto your unemployment.

I like it.

And by the way, there's also a provision in here that the first 10,200 of unemployment benefits is not taxable income for 2020, which is nice.

Yeah. Now this is, I'm going to tackle the new child tax credit. Now this one's tricky. I hope everybody will be a little patient here. Now again, I'm going to tell you what the credit is and then I'll tell you when it phases out based on your income level, single head of household or joint. So what the government has said is now this is an advanced credit. So let me make that distinction first. This is a credit based on your 2021 tax return. So if you're looking for extra tax deduction, it's March, see, nine month gestation period, you could be in the money by December 31st. What do you Think if I got. You could conceive a child and give birth December 31st. Three grand. Get busy. Get busy. Yeah, so there's a little bit of tax planning here. Okay, now here it is. It's actually three grand per child ages 6 to 17, and $3,600 for children under age 6 for the tax year 2021. So sorry, I already jumped to planning. I was thinking, okay, for any of you that are thinking of having children, 3600 bucks.

This is up because it's usually 2000. So this is a thousand dollar increase for 6 to 17 and 1600 for those of you lucky enough to be chasing around those, you know, younger kids, five or less.

Yeah. And if your income is too high, you can still be eligible for the $2,000. Deal. But this is the three you want. Okay? So here's your income level. If it phases out, if you're single making less than 75,000 or married filing joint making less than 150,000, from there, the credit would be reduced by $50 for every additional thousand of adjusted gross income earned. And this is where it gets a little tricky. So I'll let you guys read up on that. I don't want to put anybody to, you know, into a brain aneurysm here, driving down the road or on a treadmill and be liable for someone's death. So I'll just say this. You can start doing the math. Between 75 and 95,000 if you're single of adjusted gross income, or 150,000, 170,000 if you're married, filing joint. Now, if you go over those limits, you can still get the child tax credit. That's $2,000. Now, let me make an important point here. Like I said, this is for 20, 21 tax year. It's an advanced refundable credit. So the government is going to start sending out payments, periodic payments of $250, as early as July. So you're not going to probably get this check all in one chunk. They're gonna, they're gonna say, okay, you have three kids on your 2020 return. And so we're gonna take that based on your income, here's how much your credit is, and then divide it monthly before the end of the year. And you're just gonna start getting these checks to help you as a parent, which I get it. Okay. I think they should increase it if you have teenagers, but they're not doing that. I don't know why. I don't know why they. When they're under 6 you get more money, you deserve more. When they're 16. Are you kidding?

A 6 year old, so much easier

than a 16 year old. Are you kidding me? Okay, okay.

Anyway, you know, me and my teenage brothers, all the food my mom had to buy versus, like, you know, food like a two year old eats.

Yeah. And I had twin daughters that are 16.

Oh.

I mean, all the therapy I was in. But no, I'm just joking. My daughter may listen to the show, I love her. But they even admit that they were, you know, teenage girls can be a handful. Okay, now here's the thing. If you have a child during the year and you don't get the credit, you'll still get this credit on your tax return when you file. So it's an advanced credit for those that are already in the system with kids in the system. And the government can see that there is not a method right now to apply as far as I've been able to determine for the enhanced advanced credit, you'll just have to wait to get it on your tax return. So don't stress. You'll get it. And there'll probably be more developments on this, obviously as they implement it. And we'll keep you posted here. Anything you'd add to on that one, Matt?

No, that's pretty cool. But that's. That, that's just for 2021. That's just happening right now, right? This is the. Yeah, that's not going to a permanent increase in the child tax credit. That's a temporary measure for this year. All right. There's a couple other little nuggets here in the bill that might be of interest to people. One is if you lost a job during the pandemic, there is now funding where you can stay on the cobra. So you basically that's when you have a job with an employer that provides health insurance and you leave. Usually what they say is, all right, well, you can stay on your employer's health insurance, but you got to pay the full freight. Now, you don't get the company's subsidy, you're just going to stay on the company plan, but you got to pay the full cost of the health insurance. What in the bill now, though is you can have your insurance premiums paid 100% by the government for COBRA through September. So those of you that may have lost insurance, lost a job. That's a nice little pickup because, you know, health insurance can be very, very expensive.

Now, I am remiss here and I feel bad for those that have maybe left the podcast after they Heard about the business, the lack of new business benefits. We forgot about this one. And this is one that Matt is very familiar with. He has been able to qualify for this indirectly. And that is the rental assistant. They are giving $60 billion to renters because, FYI, they have extended. Oh, my gosh. The foreclosure ban and the eviction ban is now extended till September. Oh, my gosh. Now, Matt owns a rental property that has a tenant that qualified for rental assistance. But these tenants.

Thank you for clarifying that. When you said Matt's used this rental assistant on the side of the landlord. One of my rent from the city through this rental assistance program that's funded by the federal government, and. And he qualified. You know, that they. You know this. The tenant had lost their job during the pandemic. So if you are on unemployment because you've lost a job, you automatically qualify for this rental assistance. And it's not 100% of the rent. You know, rent in this Property is maybe 2300amonth or something, and I get about 1500 from the city on it, but it's significant enough, and it comes every month. So. So that's been extended to. Out in. Through September. So those of you that have rental properties, this rental assistance is a good thing. If you have anyone not paying and they're particularly blaming the pandemic or, you know, they're unemployed. Right. You're obviously interrogating this. I shouldn't say interrogating. That sounds so aggressive. You're inquiring with your tenants as to why they can't pay and make sure they know about this, because a lot of them, they're like, well, you can't evict me. Yeah. But this money's ticking on here. Like, at the end of the day, I'm gonna evict you, and I'm gonna pursue a judgment against you. So you need to pay this and to help them help you by getting rental assistance.

Oh, I love it. Jerry Maguire quote came out of nowhere there. Guys, you're amazing.

I got Austin Powers, Jerry Maguire.

Yeah, you've definitely dominated. Yeah. I want to just say it from a different perspective. We've talked to a lot of landlords and on some real estate shows and podcasts, and we speak to a lot of real estate groups, and they really have felt through this whole pandemic, they've been left out in the cold because they have not been classified as a traditional business. And they're like, hold it. I've got rental property, and that's a business. To me. And my, my revenue's down. I've got some tenants that are really struggling. And so they just turn off mentally when they hear PPP or ERC or any of these things. So I would highly encourage you to remember that this rental assistance program is an indirect benefit. Like I was just teasing Matt is. Matt got this indirectly because he took a proactive approach. He reached out to his tenant and said, hey, are you aware of this now? So you may say, well, my tenant's paying the rent. I don't need to worry about it. But when may they not start paying the rent? When maybe they stop paying the rent? You want to head the train off at the tracks? Because evicting them and trying to collect money from them is a lot more miserable than saying, hey, by the way, do you qualify for this? Here's an article on it. Here's the application. Can I help you in any way? My gosh, now you're taking a proactive approach with some of your rental property that could really pay off. So realize there's something there for you. It just doesn't feel like it's directly for you. But by helping your tenant, you're helping you. So hope that made sense.

Exactly. Yeah, that's true. That was one that's out there for the real estate investor business owners that there's more money coming down for that because that was going to dry up too here next month.

Yeah, well, I, I'll say this in summary and maybe this is a little tighter show a little more to the point and simple.

Well, this bill was only 600 pages. You know, the last, the last stimulus bill was 5,000.

So yeah, they were saving paper on this one. But some of you may go, well, hold it. 1.9 trillion. What's. You guys didn't talk about enough things? Well, the far majority of this money is going to help state governments that are down on revenue, the healthcare industry to help with the administration of the vaccines, the hospitals that have been overwhelmed and are broke or going there. Agriculture has been hit hard. Education, school districts that are down on revenue. So there's a lot of money getting thrown around here. Transportation, the airline industry has been just decimated. So you're just realize that this bill is a little more broad than what we brought up. But we wanted to give you the specifics. To you the individual. Yep. So, all right. I don't know.

Yeah. Well, thanks everybody for tuning in to another episode of the Main Street Business.

I got to give you some credit. Not only did you quote Jerry Maguire and Austin Powers. Austin Powers, Yeah. What was the other one? I forgot. I just wanted to. To summarize that because I thought you were really creative today.

So you just want to give me some kudos. I appreciate that.

Yeah. Well, I thought you carried the show today, you know.

Wow.

It'll come to me in a minute. I'll remember. Oh, yeah, he quoted another show there. But we try to have fun with that. I know. I was talking to one of our listeners over the weekend, and she was like, I don't even watch a third of the movies you guys must watch. And I'm like, I don't know. I'm the type when I'm working late, I just turn on a show, you know? Yeah. I need that white noise just going. And it's usually a. The movie because it makes it feel

like you're not working even though you are. It makes you feel like you're, you know.

Yeah. You're deceiving yourself. Yeah.

Yeah. And that's okay. That's okay.

But thanks. Go ahead.

Yeah, take us out. Yeah. Thanks, everybody. If you love the show, if you're still listening to this, you kind of like the show. So give us five stars. Share with your friends. You know, help spread. Help spread the good word here. And we'll be back, of course, next week with another amazing episode of the Main Street Business Podcast.

Yeah. Next week we'll be covering Meghan Markle and her interview and the throws of her uncomfortable spotlight. And the race back to the uk Very important topic. No, we will not be covering that. Okay, see you next week.