With the approval of the latest round of federal pandemic relief funds on December 27, 2020, struggling small businesses may have the opportunity to acquire additional PPP funding.
The first round of the Paycheck Protection Program (PPP) provided $525 billion in funds to businesses. This second round will provide $284 billion to businesses who accepted funding in the first round and need further assistance.
Similarly to the original PPP, businesses must spend 60% or more of their assistance money on payroll in order for the loan to be forgiven. PPP2 also has a provision confirming the tax deductibility of business expenses paid for with forgiven funds. The IRS has been unclear on this regarding the first round of PPP.
PPP2 Eligibility
However, these businesses need to prove several things. Most importantly for small trucking operations, businesses must prove that their quarterly gross income has dropped by at least 25% in any quarter of 2020 relative to that same quarter in 2019. For instance, if a business made $100,000 in the second quarter of 2019 but only $75,000 in the second quarter of 2020, they might be eligible to receive more funding.
Here’s all the criteria businesses need to meet in order to be eligible for PPP2:
Have 300 employees or less.
Accepted a PPP1 loan (which must have been used fully or have a plan for full use)
Quarterly income has dropped by at least 25% in any quarter of 2020 relative to that same quarter in 2019.
While some sectors of the trucking industry have been hit very hard by the pandemic, according to this Overdrive article, most will not meet the 25% revenue decrease required for PPP2 funding.
Should you apply for PPP2?
Obviously the first question to ask yourself is if you meet the eligibility criteria above. Check you books and look at your quarterly numbers especially. If you are not eligible, please don’t bog down the system by adding your application to the mix.
Secondly, you should be aware that there is some language that needs clarification in PPP2, so you may want to wait until that is clarified by the SBA. More information here.
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At the end of last week, the FMCSA extended its COVID-19 HOS waiver until the end of the year for essential items. The waiver is intended to help transportation companies bring essential items to the areas of greatest need during the pandemic.
The previous extension was set to expire on September 14. Here’s what is and is not covered under the new HOS waiver.
New HOS waiver
The latest extension to the HOS waiver exempts drivers from certain HOS rules until December 31. You can find more information in the FMCSA announcement here.
Exempted cargo and products include:
Livestock and livestock feed
Medical supplies and equipment related to the testing, diagnosis and treatment of COVID-19
Supplies and equipment necessary for community safety, sanitation, and prevention of community transmission of COVID-19 such as masks, gloves, hand sanitizer, soap and disinfectants
Food, paper products and other groceries for emergency restocking of distribution centers or stored.
The FMCSA was careful to say that “routine commercial deliveries, including mixed loads with a nominal quantity of qualifying emergency relief added to obtain the benefits of this emergency declaration”, are not covered under the waiver.
Drivers are also cautioned to follow traffic laws and carriers are reminded that they cannot force drivers to continue working if they need a break.
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Last week, the FMCSA temporarily suspended HOS rules for truckers hauling essential supplies and providing direct assistance to relief efforts for the Coronavirus.
Now, as more and more people are working from home in an effort to stop the spread of COVID-19, many government offices like the DMV are shutting down.
So many states have no way of verifying or keeping track of trucking registration like IFTA and IRP and truckers have no way of renewing their licenses.
To ease this tension in the midst of the COVID-19 outbreak, many states are waiving or suspending some or all of the registration requirements for IFTA and IRP.
This does not mean that all regulations are null and void, however. Most states have also asked that you carry a copy of a waiver (most of which are linked below) with you while you travel in their borders.
*It is your responsibility to read the full explanation provided by state governments before you attempt any travel.*
Below is a full breakdown of every exemption, extension, and suspension we could find.
IRP registrants with fleets expiring in March are extended until May 15, 2020.
90-day IFTA extension can be applied for by completing a waiver if you or a relative you are caring for is sick with COVID-19. Waiver available at: CDTFA.ca.gov
IRP registration enforcement suspended until April, 18.
90-day IFTA extension can be applied for by completing a waiver if you or a relative you are caring for is sick with COVID-19. Waiver available at: Colorado.gov/tax.
IRP registration deadlines are delayed in Iowa for all commercial vehicles until April 16, 2020.
IRP and IFTA requirements for any commercial vehicles traveling through the state of Iowa to provide direct COVID-19 assistance are waived until April 30, 2020.
IRP trip permit requirements for trucks traveling through Kansas have been suspended for trucks operating in association with disaster assistance until further notice.
Registration requirements for Kansas IRP vehicles providing disaster relief is extended until May 15, 2020.
IRP and IFTA registrations expiring March through May 2020 are extended until May 31, 2020. Temporary IRP and IFTA requirements are waived for vehicles traveling through New Jersey for relief efforts.
IRP registration enforcement suspended for expiration dates on after March 20, 2020. IRP and IFTA enforcement also suspended for trucks traveling through the state as a part of emergency relief.
Because of the havoc COVID-19 is creating for the US economy (and the rest of the world), the federal government has taken a number of steps to help curb its economic impact in 2020.
Then, on March 31, the CARES Act was passed. This extended a number of relief programs to small businesses with over $2 trillion in stimulus money.
One of the latest and most practical parts of the CARES Act is the new IRS Form 7200. Here’s what you need to know about the IRS Form 7200.
What is the IRS Form 7200 for?
The IRS Form 7200 (officially called Advance Payment of Employer Credits Due to COVID-19) allows employers to request an advance on their tax credits relating to the COVID-19 crisis.
Form 7200 was specifically created for tax credits for employee sick leave, family leave, and payroll retention related to the economic impact of the Coronavirus.
Employers can get up to a 50% tax refund on wages paid up to $10,000 if they maintain payroll.
Who is the IRS Form 7200 for?
The IRS Form 7200 is for employers who filed employment tax returns such as 941, 943, 944, and/or CT-1.
How to file the IRS Form 7200
Use our sister-product TaxBandits! Their simple e-file process takes the guesswork out of all types of tax forms, including Form 7200.
*Disclaimer: we are not medical professionals. Please consult your doctor immediately if you believe you have COVID-19.*
It’s a crazy time. While the rest of the world has shut down because of COVID-19, truckers are still working are hard to make sure our shelves are stocked.
Like the other essential workers such as doctors, nurses, and law enforcement, truckers run a great risk for contracting COVID-19.
So, what do you do if you contract the Coronavirus while on the road?
Here are the top tips from the CDC and a trucker who actually got COVID-19 while on the road.
How the CDC recommends quarantining
If you have mild to moderate symptoms, you should be able to stay in your truck while you recover. However, if you develop any of the following symptoms, you should immediately seek medical attention:
Trouble breathing
Persistent pain or pressure in the chest
New confusion or inability to arouse
Bluish lips or face
Check out this infographic for more tips for quarantining.
Handling COVID-19 from your truck
In an article from Overdrive, author Gary Buchs relates the story of a driver named Jim who contracted COVID-19 while on the road.
Jim was forced to park and self-quarantine for over two weeks, 200 miles from home.
Fortunately, Jim recovered without requiring hospitalization. His biggest tips for quarantining in your truck can be found here.
Since the outbreak of the Coronavirus pandemic and the following shutdowns and quarantines, many American businesses have lost significant revenue.
To help keep the American economy from falling off a cliff, the federal government has enacted several measures designed to help keep the economy afloat, including the CARES Act and several tax extensions.
Let’s talk about the CARES Act and the Federal Tax Extensions.
CARES Act
The Coronavirus Aid Relief and Economic Security Act (CARES Act) will pump approximately $2 trillion in stimulus into the American economy.
It was just passed on March 27, 2020.
Individuals will be receiving stimulus money depending on the amount of their yearly income.
The CARES Act also provides relief to businesses including owner-operators, nonprofits, individuals, state and local governing authorities during the Coronavirus emergency.
The highlights of the CARES Act
1. Paycheck Protection Program (PPP)
This program directed $349 billion towards business operating expenses and job retention.
Because of huge demand, this funding for this program has already been exhausted as of April 16, 2020.
2. Economic Injury Disaster Loans (EIDL)
Highlights: This program will give up to $2 million to small businesses.
About: The EIDL program funds small businesses or private including non-profits that suffer from the economic injury due to declared disaster regardless of the physical damage to the applicant.
Eligibility: Small businesses must have suffered an economic injury and should be located in the disaster declared county or a contiguous county.
There are no upfront fees and early-payment penalties charged by the SBA.
3. Employee Retention Tax Credit
Highlights: This program provides a refundable payroll tax credit for 50 percent of qualified wages paid by employers.
About: This program provides the businesses, including nonprofits, that are affected by COVID-19 with federal tax credits for the wages paid from March 13, 2020, to December 31, 2020.
Eligibility: Employers whose business is fully or partially suspended due to the COVID-19 shut-down or who experienced a 50% reduction in gross revenue for the calendar quarter compared with the same quarter last year.
4. Deferral of Employer Payroll Tax Payments
Highlights: Allows businesses and the self-employed to defer certain payroll taxes.
About: This program enables businesses and self-employed individuals to defer the employer portion of social security tax through the end of 2020. Half of the deferred amount will be due by the end of 2021 and another half will be due by the end of 2022.
Eligibility: All businesses and non-profits are eligible to defer their payroll taxes unless they receive a loan under the SBA Paycheck Protection Program.
5. Net Operating Loss/Excess Business Loss Changes
Highlights: The CARES Act modifies the rules relating to net operating losses carrybacks.
About: Previously, net operating losses could not be carried back to prior years. However, the CARES Act permits a five-year carryback of net operating losses.
Eligibility: All the businesses that suffer a loss in 2020 as a result of the COVID-19 pandemic.
6. Business Interest Deduction
Highlights: The CARES Act increases the business interest deduction limit to 50%.
About: Previously, the business interest deduction limitation defined by the Tax Cuts and Jobs Act was 30%. This allows the businesses to calculate the limit for the taxable year beginning in 2020 based on the adjusted taxable income for the taxable year beginning in 2019.
Eligibility: All the businesses that suffer a loss in 2020 as a result of the COVID-19 pandemic.
These are just a few opportunities that your business can take advantage of.
If you still want additional information, please visit the following links or talk to your accountant for further assistance.
7. Families First Coronavirus Response Act
Highlights: FFCRA brings substantial changes to paid sick and FMLA leave for employees in 2020. Businesses can now seek reimbursement for this through tax credits.
About: Employers are now required to provide employees with up to 10 weeks of paid Family and Medical Leave. Also, they must offer paid sick leave to those who are unable to work because they were affected by COVID-19, in self-quarantine, in isolation, and/or caring for their family members.
Eligibility: Any business with fewer than 500 employees is eligible to claim tax credits using the Families First Coronavirus Response Act.
The IRS has created special income tax extensions in response to the COVID-19 crisis.
Basically, this extension changes the deadline for individuals and some businesses to file and pay their income taxes from April 15 to July 15, 2020.
You do not have to be directly experiencing the effects of COVID-19 in order to use this extension.
Who is eligible for the COVID-19 tax extensions?
Anyone with an April 15, 2020 tax deadline is eligible for the extension. If you qualify, you do not have to do anything to claim this extension. Simply file and pay your taxes by July 15, 2020, as you normally would.
What is the new tax deadline?
The new tax deadline is July 15, 2020, but you can request even more time with Form 7004 (businesses) or Form 4868 (individuals) if you need until October 15, 2020.
If you need a longer extension, check out our sister-product Express Extension!
What Forms are eligible?
Form 1040, 1040-SR, 1040-NR, 1040-NR-EZ, 1040-PR, 1040-SS
No. Under this extension, only income taxes are covered.
Are State Tax Deadlines Also Extended?
That depends entirely on which state you live in. Each state has created it’s own standards for income taxes. Consult the list below to see what your state has decided.
April 15 (No change) – MN & NH
May 15 – MS
June 1 – VA
June 15 – CT, ID, & WA
July 15 – AL, AR, AZ, CA, CO, DC, DE, GA, IL, IN, KS, KY, LA, MA, ME, MD, MI, MN, MO, MT, NC, ND, NE, NM, NY, OH, OK, OR, PA, SC, TN, UT, WV, & WI
July 31 – IA
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Our sister-product TaxBandits is a complete e-filing solution for wage tax forms, payroll forms, ACA forms, and much more!
The Coronavirus outbreak has developed a lot since the last time we wrote about how it might affect the trucking industry.
At that time, we had little information about Coronavirus because almost no one outside China had contracted it. Now, of course, COVID-19 is a full-blown pandemic and it’s shutting down the United States.
So what do you need to know and what does the future hold?
We cover all that and more below.
Coronavirus and truckstop shutdowns
You’d have to be living under a rock to not know that restaurants, schools, and all gatherings of more than 10 people are being closed or canceled for the foreseeable future.
But what is more urgent for truckers is that rest stops and truck stops around the nation are being partially or entirely shuttered.
Organizations like OOIDA are working hard to make sure that services for truckers don’t close entirely. They are reminding the United States that truck drivers being able to work effectively is key to well being of the entire nation.
But don’t think every load is an “essential supply”. In order to be considered exempt, load needs to be directly assisting in an emergency relief effort with essential supplies.
As of March 19, The FMCSA defines essential supplies as any of the following:
Medical supplies and equipment related to the testing, diagnosis, and treatment of COVID-19
Supplies like masks, gloves, hand sanitizer, soap, and disinfectants
Food for emergency restocking of stores
Equipment, supplies, and persons necessary to establish and manage temporary housing, quarantine, and isolation facilities
Immediate precursor raw materials – such as paper, plastic or alcohol – used for the manufacture of essential items
Fuel
The FMCSA definition of direct assistance does include not routine commercial deliveries or loads that are not directly being hauled for emergency relief efforts. So just because you are hauling groceries does not mean you are exempted.
Coronavirus and MATS
One of the most disheartening results of the coronavirus outbreak for our team was the cancellation of the Mid-America Trucking Show in Louisville Kentucky.
It was set to be held from March 25-27, and we were super excited to meet you there. It’s one of the few opportunities we get to see you face-to-face and we had lots of free stuff to give away.
But rest assured, we’ll see you at MATS in 2021!
Coronavirus and the future
For now, at least, the truck drivers are still in high demand. The future is still unclear, so we will keep updating you on how Coronavirus is affecting the trucking industry going forward.
