Usually, in times of economic dislocation such as the COVID-19 pandemic, the self-employed get no special government help. For example, you generally do not receive benefits that employees get, such as unemployment and paid sick leave.
But this time it’s different. Because of the COVID-19 pandemic, you can qualify for the following seven benefits:
1. Paycheck Protection Program (PPP) monies. Self-employed individuals with no employees can obtain forgivable first-draw and second-draw PPP monies of up to $20,833 for each draw, or $41,666 in total.
The monies were to be available through May 31, but only if the funds lasted until then. For most borrowers, they did not. Traditional banks have used their allotment, but some nonprofits and credit unions still have funds and expect them to last until May 31.
Apply now if you haven’t already done so. If you already received a PPP loan, you may qualify for a second-draw loan if your 2020 income for any quarter declined by 25 percent compared with the same 2019 quarter.
2. Economic Injury Disaster Loans (EIDLs). These 3.75 percent interest loans of up to $500,000 are available to the self-employed and are not forgivable. The self-employed can borrow up to $25,000 without any collateral.
3. Prior EIDL Advances. The Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act, enacted on December 27, 2020, eliminates the rules that required reducing your PPP forgiveness by the amount of your EIDL Advance and requires the Small Business Administration to refund your advance if your loan forgiveness has been previously reduced.
4. New Targeted EIDL Advances. You might qualify for a Targeted EIDL Advance of up to $10,000 if (a) your business is located in a low-income community, and (b) you suffered a 30 percent reduction in revenue during an eight-week period beginning March 2, 2020, or later. Unlike EIDLs, Targeted EIDL Advances need not be paid back. They are tax-free government grants.
5. Sick and family leave tax credits. If you’re unable to work due to COVID-19, or if you need to care for a family member, you can qualify for refundable sick leave and family leave tax credits of up to $15,511 in 2020 and $17,511 in 2021. You can get up to $511 per day for 10 days if you’re sick. You can get up to $200 per day for 70 days if you need to care for others. These credits last through September 30, 2021.
6. Affordable Care Act (ACA) premium tax credits. Congress removed the ACA subsidy cliff (400 percent of the federal poverty level) for 2020 and 2021. During these years, you need pay no more than 8.5 percent of your household income for ACA coverage. You are entitled to premium tax credits to the extent midlevel silver ACA coverage exceeds this amount.
7. Unemployment for the self-employed. For the first time ever, self-employed individuals may receive unemployment benefits. The Pandemic Unemployment Assistance program has been extended to September 6, 2021. You’ll qualify for unemployment only if you’re earning little or no income.
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