So much news, so little time. It is hard to know what is true and what is not, what we should, and should not, be doing, but we are, daily, fielding a number of inquiries from clients related to the financial implications of what is happening (because it is an integral part of our job). We are devoting this episode of “As the COVID Spins” to debunking some myths that are out there.

For financial information, take a look at the Small Business Administration (https://www.sba.gov/page/coronavirus-covid-19-small-business-guidance-loan-resources), the U.S. Department of Labor (https://www.dol.gov/coronavirus), the Internal Revenue Service (irs.gov), and other federal, state and local government websites. These agencies are updating information on a daily basis, so keep checking back if you do not yet have an answer to your question, or you do not like the first answer you got. This is an instance of “wait a minute, it might change”.

Loan Related Myths – There is no money left and it all went to big corporations

You may have heard that a lot of the money earmarked for small businesses under the CARES Act went to businesses and non-profits that were anything but small. And that is true. Companies that were not intended to be eligible managed to shoehorn their applications into the guidelines set out for these loan programs, and there is currently a concerted effort to get it back from them.

You have probably also heard that the available small business money ran out in under two weeks. It did. However, since those stories came out over the last couple of weeks, there has been an additional tranche of money made available to small businesses under the Department of the Interior, Environment, and Related Agencies Appropriations Act, 2019 which is dedicated to getting the money out to true small and micro-businesses. There is also a congressional resolution to perform oversight of the first lifeboat of money, making sure it went where it should have—small businesses. 48 percent of Americans work in small businesses, 18% working for businesses with fewer than 20 employees. And TaxPanacea, of course, counts!

I am not eligible for unemployment because (choose as many as apply)

Unemployment is obviously way up. While it’s unlikely we’ll see 50% unemployment, and no one knows what the current figure is (April numbers will come out in May), it is undeniable that 26 million people have begun claiming unemployment in the last 5 weeks, and the number of unemployed may be undercounted by as much as 30-40%. Be prepared for that number to continue growing, but at a slower rate as some companies reopen, or don’t, but rehire employees in order to take advantage of some of the federal loans being offered that require your payroll to remain the same as it was in mid-February.

For those who have been having little or no success in accessing unemployment, either because the system is overwhelmed, or they cannot prove their earnings, or, in the case of many, they do not even realize they qualify, unemployment systems at every state Department of Labor is overwhelmed. There are far more claims than people to process them, and the high new unemployment numbers we’re seeing week after week are due to (1) new claims as more are laid off, (2) people who are only now realizing they are eligible, and (3) the backlog of people who have put in claims that haven’t been processed.

Unfortunately, in this particular game, you only get counted once someone has stamped your applications “Approved”. Fortunately, though, your claim will be retroactive either to the start of the pandemic or the date you lost work, whichever is later. And you will also be eligible for retroactive payments of the additional $600 per week the federal government is putting into the pot. For the self-employed, many states have been unable to sign you up because their systems do not allow unemployment to be paid to the self-employed. That has, of course, changed with recent federal legislation, but the reprogrammed state Department of Labor systems are only now coming on-line. If you tried before and were unsuccessful at making an application for benefits, now would be a good time to try again.

Stimulus Checks Require an Application and Need to be Repaid

Wrong and wrong: there is no application process, and there is no repayment. In addition, these payments are not taxable income to you.

If you have not received your stimulus payment yet, there are many reasons why. First, if you are looking for a paper check, those checks take time to process. The IRS can handle about 5 million of these checks each week. There are probably about 8 weeks of checks in the system at the moment, so you will just have to be patient. If you would rather receive direct deposit but have not had any success giving the IRS your banking information, they have now fixed their information-gathering website. Go to www.irs.gov, click on the “Get My Payment” tab, and input your banking information.

You won’t automatically receive a check if you haven’t filed an income tax return in either 2018 or 2019 and you’re not already receiving Social Security, Railroad Retirement, or VA benefits unless you go to the IRS website at https://www.irs.gov/coronavirus/non-filers-enter-payment-info-here. And you will not qualify for payment at all if you are over age 16 and you were claimed on your parents’ return or if you and/or your spouse is an immigrant without a valid Social Security Number (ITINs do not qualify).

Misunderstandings Versus Scams: Mistakes Do Happen

The COVID-19 pandemic is unlike anything we have faced before. That means there is a lot of trial and error in all areas as we attempt to address it. Sometimes things work, other times they do not. Government bodies are rushing to respond, setting up websites, and disseminating both funds and information. This rush has led to mistakes, and the delays have led to confusion and rumor. Some have chosen to exploit the situation, and others have perpetuated falsehoods out of fear. Please beware of anyone offering to assist you in getting your stimulus payment, or help you file a loan application for a fee. These people are not your friends, and they are out to take your money.

Finally, before you make any moves, check, and then double-check your information. Make sure your sources are trustworthy, even if you do not like the answers you are receiving. Do not rely on what you are hearing from your uncle or your next-door neighbor; each of our situations is different, and while other people may be well-intentioned, the relief packages that are being offered on both the federal and state levels run to thousands of pages of legislation and contain minutiae that no one person could ever wrap their head around. If you need help navigating what is, or is not, available to you, please call us. We are happy to help you access the answers to your questions.