The CARES Act, a $ 2 trillion coronavirus economic stimulus package signed on March 27, includes some of the biggest benefits for concert and small business workers in the history of the United States.
This is good news for the music industry. But as banks and state unemployment offices rush to update their websites and meet the demand for web and phone applications, the process of asking for help – not to mention understanding it – n was not easy for everyone.
Monday, April 6, the Recording Academy hosted a CARES Act webinar to discuss the impact of the bill on the music community with lawyers for Greenberg Traurig Kelly Bunting and Monica Schulteis. “We receive advice on a daily basis,” said the director of industry, government and member relations for the Recording Academy. Daryl Friedman. “It’s really a very fast process, and we keep you posted in real time. “
Read on for an overview of how the bill affects music workers and small businesses.
Everyone will (more than likely) receive a stimulus payment.
U.S. residents with adjusted gross income up to $ 75,000 (or $ 112,500 for single parents or $ 150,000 for married couples filing joint returns) are eligible to receive a one-time stimulus payment of $ 1,200 (or $ 2,400 for joint returns) from the Internal Revenue Service (IRS). For parents, an additional $ 500 is allocated for each child under the age of 17.
If your income is above the threshold, this total payment will be reduced by $ 5 for every $ 100 of annual income above the threshold. But if you are a single filer earning more than $ 99,000 a year (or $ 136,500 for single parents, or $ 198,000 for joint taxpayers without children), you are no longer eligible.
For the vast majority of people, no action is necessary. The IRS will automatically calculate and send the stimulus payment by check or direct deposit using the information from your last tax return (2019 or 2018). If you do not file tax but receive Social Security payments, the IRS will use this information for your check. To receive a check, you must have a social security number.
If you’re still unsure, TurboTax has set up a free online stimulus check calculator here.
For the very first time, concert workers can receive unemployment assistance.
Self-employed workers and independent entrepreneurs (as well as sole proprietorships, part-time workers and those with a limited work history) who are unemployed due to the pandemic * are eligible for state unemployment benefits. It is the first time in history that these workers – who make up a large part of the music industry – are entitled to these benefits.
The temporary program is administered by the state but funded by the federal government, which means that you must apply through your state’s unemployment benefit program (find it here).
The program adds an additional $ 600 a week from the federal government, in addition to the unemployment benefit your state provides, until July 31. Most states offer 26 weeks of unemployment benefits, just over six months. Under the new program, if you have not found a job by the time your state unemployment benefits expire, you will receive an additional 13 weeks of federal unemployment benefits.
No additional form is required for federal benefits. If you apply and are approved for state employment benefits, you will automatically receive federal dollars. The program runs until December 21 and state and unemployment benefits are retroactive.
Requirements vary by state, but many states also remove barriers in the application process to help unemployed people get benefits faster. Most states have waived the usual week-long waiting period for this first unemployment check, as well as the requirement that applicants actively seek work. In some states, such as California and Indiana, you still need to certify that you are able and available to work.
And music workers who have been deprived of some, but not all, of their income can still claim unemployment benefits. For example, consider a music teacher who saw 60% of students cancel sessions in the middle of the pandemic. Even if the teacher retains the remaining 40% of students, he or she may still be eligible for short-time working to compensate for the loss of income.
Anyone on leave or temporarily unemployed (or awaiting a concert postponement, for example) can apply for benefits in the meantime. “Each unemployment office in the state offers partial unemployment benefits,” said Bunting. “If you are on leave, or temporarily unemployed and need to call back, or if you expect a concert to be [rescheduled] … file, file, file. “
Green card holders are eligible, she added: “As long as you are legally allowed to work in this country, you are eligible for unemployment benefits. “
If you’re a member of a group, Bunting said that each member should apply for unemployment benefits in their state of primary residence (which may be different from where the group is supposed to be “based”).
*“Unemployed because of the pandemic” can mean a list of things to wash. You are eligible if you have lost your job or cannot work because you have been diagnosed with coronavirus, have symptoms and are seeking treatment, or if a member of your household checks these boxes. You are also eligible if you are the primary caregiver for a child whose school has been closed; or if you cannot access the job because the job has been closed, a job has been canceled, you are in an isolation order, or you have been forced to leave a job because of a coronavirus.
Small businesses – including many recording studios, independent publishing houses and even some self-employed workers – are eligible for a variety of loans and grants.
The two main CARES programs for small music companies are Economic Disaster Loans (EIDL), which now include emergency disaster grants, and the all-new Check Protection Program. pays (PPP). These loans are made through the Small Business Administration (SBA). You can apply for both loans, but you cannot use the money for the same expenses.
Small businesses are defined as those with 500 or fewer employees. But under the new law, this also includes individuals who operate as independent contractors, sole proprietors (with or without employees) and the self-employed. The only caveat is that you must have been operational by January 31, 2020.
Eligible businesses can apply for a low interest rate EIDL of up to $ 2 million here, which can be used to cover any expenses that would have been paid if the pandemic had not occurred, such as payroll, debts , rent and mortgage payments. These loans have to be repaid.
The law also creates a total fund of $ 10 billion for emergency disaster grants, which do not have to be repaid, as long as you use the money for the specified expenses. When applying for EIDL using the form linked above, you can check a box to request an advance of up to $ 10,000 to cover immediate pay, mortgage, rent, debts and other expenses of operation while waiting for additional help to be brought. These grants are available until December 31. And payments will come quickly: the law requires the SBA to disburse money within three days of verifying the eligibility of the business or individual.
Finally, the CARES law establishes a new type of loan – the paycheck protection program. The same companies previously mentioned are eligible (although this time the business must be operational since February 15, 2020). Small businesses and sole proprietorships can apply for loans from SBA-certified banks now, and independent entrepreneurs and the self-employed can do so from April 10.
These low-cost, no-cost loans of up to $ 10 million can be used to cover interest on a mortgage, rent, utilities, interest on debts, salary costs and certain benefits, such as health care and annual leave. Repayment is deferred for at least six months, up to a year. These loans are available until June 30.
To calculate the amount to which you are eligible, multiply by 2.5 your average salary costs for all employees in 2019 (up to $ 100,000 of salary per employee). Schulteis said the SBA guidelines for independent contractors here were inconsistent. But at the time of writing, employers should not include independent contractors in payroll calculations, and Schulteis recommended that independent contractors consider requesting a P3 themselves.
Because PPP is intended to encourage companies to keep their employees on the payroll, the SBA will not fully forgive loans – which means you don’t have to pay them back – if all employees are kept on the list eight weeks after the loan. is granted and if at least 75% of the loan is used for salary costs. If you lose full-time employees, or if wages or salaries go down, forgiveness will be reduced – unless you are able to restore full-time employment and salary levels by June 30.
A note for LLCs:
Individual members of the music industry often work as an LLC – for example, an independent producer or recording studio owner can bill through an LLC, even if he is the only person on the payroll .
LLCs managed by a single employee may be eligible for both a PPP loan and unemployment benefits; however, you cannot apply for both. Schulteis recommended that these people calculate the benefits they would receive for each and request the most beneficial program.
What happens when these programs reach their end date?
Each of these programs has a firm end date, but it is unclear when the restrictions on mass gatherings will be lifted and when live concerts will be specifically reinstated. “For musicians, the needs may be longer term than for many other industries,” Friedman noted. “Restaurants can [re-]open, but not the stadiums. “
Schulteis urged music professionals to remember that the CARES law is an emergency law intended to provide short-term help. Congress is currently developing a fourth stimulus package. “The intention of the CARES law was to serve as a dressing, vital support for individuals and businesses,” she said. “It aims to keep people afloat and dissolve for a very short time.”
In the meantime, the Recording Academy has built a Music Covid Relief online resource center and provides daily updates on Twitter. For more assistance, visit BillboardState-by-State resource guide for music professionals, which includes more than four dozen relief funds.