A complete guide to COVID-19 financial relief

Pandemic Relief Loans

There are several actions that could trigger this block including submitting a certain word or phrase, a SQL command or malformed data. Our free tax newsletter.As a tax attorney and writer, my goal is to help taxpayers get out of—and stay out of—trouble. Since 2020, IRS-Criminal Investigation (CI) has investigated 1,644 COVID-related tax and money laundering cases potentially totaling $8.9 billion, with well over half that amount coming from cases opened in the last year. There have been important changes to the Child Tax Credit (CTC) that will help many families. The American Rescue Plan Act (ARPA) of 2021 expands the CTC for tax year 2021 only.

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IRS Criminal Investigation Says COVID-Related Fraud Totaled Nearly $9 Billion

“With this announcement, the Biden-Harris Administration is showing how we’re taking further steps not only to fix those trap doors, but also to expand opportunity to many more Americans.” Better, more consistent data is needed to determine if small business loans are generally reaching minority owners who often have more barriers to accessing credit. To that end, the Consumer Financial Protection Bureau is working on a new regulation that will require lenders to collect racial demographic data on small business loan borrowers. Those rules under Section 1071 of the Dodd-Frank Act will be finalized next year after the CFPB considers some 2,100 comments from stakeholders. This coming finance regulation could be a game-changer for helping close racial inequities in lending.

Following the passage of the CAA, the SBA released a new, simpler (two-page) loan forgiveness application for PPP loans of $150,000 or less. Additionally, the SBA and the Treasury relaxed the rules for PPP lenders to allow them to process forgiveness applications faster. Keep in mind that, with similar limits, previous advances averaged just $3,459 in 2020 and forgivable loans averaged only $100,729.

Federal Financial Data

In the case of self-employed people, their share of loans grew from 9% in the program’s first phase to 86% in 2021, according to the Government Accountability Office. House says lenders are currently more focused on proof that you’ll be able to repay the loan. “Many banks and credit unions are offering small-dollar loans to help people bridge the gap between income and expenses during this time,” House says. “I recommend asking the bank or credit union someone already uses about the loans they offer.” There is no formal application process for Targeted EIDL Advance forgiveness. The only requirement is that you must spend the advance only for the expenses listed above.

  • Pounds and his co-defendants were accused of running a scheme to obtain COVID-related loans under false pretenses, often claiming the loans were for nonprofit, faith-based organizations.
  • In addition, any PPP loans that were wrongfully forgiven, either due to omission or misrepresentation by the taxpayer, will be treated as taxable income.
  • “Businesses that really haven’t recovered the entirety of their business levels from pre-pandemic are now commencing payments on loans they took to get through a really, really uncertain time,” Hetrick said.
  • Becky House, education and communication director at American Financial Solutions, says a variety of financial institutions, including local and national banks, have begun offering this type of loan.
  • Passage of the PPP Extension Act gives applicants until May 31, 2021, to apply for a PPP loan, gives lenders until June 30, 2021, to process those applications, and extends the covered period for all PPP loans to June 30, 2021.

In order to afford the payments, Jacobs decided to open the restaurant one more day a week. We provide documents in 17 different languages to help you understand eligibility requirements, fill out applications, and answer frequently asked questions. The U.S. Chamber of Commerce has issued this guide and cheat sheet to help small businesses and self-employed individuals prepare to file for a loan from the CARES Act’s Paycheck Protection Program. More information Pandemic Relief Loans on claiming relief will be available to borrowers in the coming weeks.Borrowers can sign up to be notified when this information is available at StudentAid.gov/debtrelief. The American Rescue Plan extended employment assistance, starting in March 2021, and waived some federal taxes on unemployment benefits to assist those who lost work due to the COVID-19 crisis. If you have excellent credit, you may be eligible for a loan with an interest rate as low as 3%.

How does direct relief work under the American Rescue Plan?

The agency has 20 field offices located across the U.S. and 12 attaché posts abroad. After Congress passed the CARES Act in March 2020 to provide a range of relief aid to businesses and individuals, Metzler was able to secure a $100,000 forgivable, low-interest and uncollateralized PPP loan, money he used to pay staff and catch up on rent. In 2020, when the US announced emergency loans to help small businesses struggling under Covid-19 shutdowns, funding went disproportionately to the higher-income zip codes of Louisiana’s capital. Better-resourced firms such as medical and legal offices collected most of the relief aid. But in 2021, more loans went to lower-income neighborhoods of the city—to beauty salons, barber shops, day care centers and other more vulnerable enterprises, according to a Bloomberg analysis of Small Business Administration data updated last month.

Pandemic Relief Loans

In communities across the country, these changes resulted in smaller-sized loans going to a much larger number of smaller businesses, many of whom didn’t have established ties to the big banks that dominated the early part of PPP. In total, businesses have received 11.5 million loans through the $800 billion aid program, which is one of the biggest in US history. Data about the program also provides unprecedented insight into small business lending, particularly into racial demographic data not previously collected on a large scale. By 2021, the Small Business Administration, the program’s administrator, had admitted about 600 new lenders, including small community banks that serve minorities, and allowed more sole proprietors and self-employed people to participate.

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