I have been reminded lately of a poem I heard years ago that has always stuck with me.  It seems especially appropriate to share right now, and I urge everyone to take its message to heart:

One ship drives east and another drives west
With the selfsame winds that blow.
Tis the set of the sails
And not the gales
Which tells us the way to go.
Like the winds of the seas are the ways of fate,
As we voyage along through the life:
Tis the set of a soul
That decides its goal,
And not the calm or the strife.

Ella Wheeler Wilcox

SBA Loan Updates: Not all banks are up and running yet on the PPP loans (see our April 2^nd post for more info).  The ones that are, seem to be accepting applications only from their existing customers.  Even then however, they don’t have all their systems in place to process the loans.  It’s a little like the airline letting all the ticketed passengers onto the plane, but they’re still trying to get the engines bolted on before they can take off.

There seems to be a sort of run on the bank, so to speak, to get these loans, partly because Treasury predicts they’ll run out of funding and not be able to fund them all.  So even companies that thought they could hold on for a month or two before deciding what to do, are lining up to get a loan while they can, just in case.  There is already talk of additional funding, perhaps that will ease fears and let things settle down a bit.

We’re also seeing more businesses applying for the EIDL loan advance to hedge their bets about getting a PPP loan, which will likely take longer.  Originally SBA said the EIDL advance would be issued within three days of applying, but so far that hasn’t happened.  Now they’re shooting for a week, but it may take longer as they get their systems up and running to catch up.

Rebate Checks:  IRS says the $1,200 rebates to individual taxpayers will begin going out by April 17^th.  However, if you did not use direct deposit (refund) or direct debit (balance due) on your 2018 or 2019 return, it may be August (!) before you receive a paper check.  IRS plans to update their irs.gov website so you can update your bank information for direct deposit if needed, but as of this morning it hasn’t been posted yet.

The full rebate will go to taxpayers who filed a joint return and reported Adjusted Gross Income (AGI*) of $150,000 or less, and $75,000 or less for everyone else.  The rebate phases out above those amounts, so you may still receive a partial rebate with an AGI of $198,000 or $99,000, respectively. IRS will look first at your 2019 return if you have filed it, or 2018 if you haven’t.  If you haven’t filed your 2019 return yet and it would qualify you for a larger rebate than your 2018 AGI would, that’s a reason to file as soon as possible.  Conversely, if your 2019 AGI would reduce your rebate compared to 2018, you’ll receive more if you hold off filing.  You have the flexibility to wait since the filing deadline has been pushed back from April 15^th to July 15^th this year.

If you receive Social Security benefits and aren’t required to file a return due to low income, you’ll still get a rebate without filing one.  If you owe back taxes, the rebate will not be used to offset those obligations.

(*AGI is your total income after certain deductions like IRAs, self-employed health insurance etc., but before your standard or itemized deductions.)

Unemployment Tidbits: In just the last two weeks, over 468,000 Ohioans applied for unemployment.  By comparison, for all of 2019, 364,000 claims were filed.  You can understand the system is being strained to accommodate the increased demand.  ODJFS, which administers Ohio unemployment, has added 300 employees to handle processing these claims, and is looking to add another 1,000.  They have also expanded server capacity by 20 times.  If you have problems getting on the site, their system may be slow, but there may also be bottlenecks in the internet service that gets you from your computer to theirs.  Patience required.

Although the way has been cleared for self-employeds to file for unemployment, that application process isn’t open yet.  States are still waiting on the feds for instructions how that is going to work, and once they do have the necessary guidance, it will probably take some time for them to set up the application and approval process.  Once it is in place, they say you’ll get benefits retroactive to your first date of eligibility.

If you apply, use mass layoff code 2000180.  If you already applied, no need to go back and add this.

Essential businesses are still hiring, visit https://jobsearch.ohio.gov/wps/portal/gov/jobsearch/

2020 Taxes: Unemployment benefits are taxable income, at least under current law. Will there be an exception made for this year?  If so, Congress probably won’t consider that until later in the year due to more urgent issues at the moment.  If you can get by with a little less, we suggest having 10% federal income tax withheld.  If your benefits are made nontaxable later, you’ll get the tax withheld back as a refund with next year’s return, just as you would with wage withholding.

Looking Ahead:  As I have said before, we do all need to stay informed of the current situation and developments, but don’t get bogged down in that.  I recommend limiting your time listening to the news to a bare minimum, ditto for social media that is politically slanted or spreading the most recent “snake oil” cures which seem to abound.
Too much time on those things tends to create a feedback loop that only draws us ever deeper into fear, despair and panic.  Instead, let’s focus our time and attention on things that lift us up: connecting with and supporting neighbors and loved ones, and making constructive plans for what we’re going to do when this calms down.

I don’t know for sure what “normal” is going to look like when we come through this, but I’m confident better times are indeed ahead.  If we can be of help to you in any way in the meantime, please get in touch.

We are closely monitoring developments, emerging details and planning opportunities surrounding the current pandemic, and post frequent updates on our blog as we learn more.  Check back often, or follow us on LinkedIn, Facebook or Twitter for alerts.