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FAQ Updates for PPP Economic Injury Disaster Loans AND Economic Impact Payments

August 13, 2020

The IRS recently updated their FAQ pages related to Economic Injury Disaster Loans (EIDL) as a part of the Payroll Protection Program (PPP) and Economic Impact Payments (EIP), also known as Stimulus Payments. To help simplify the details of what was added to these FAQ pages, the BLS Team outlined the highlights below.

PPP EIDL FAQ Highlights:

 

  • If a borrower applied for an Economic Injury Disaster Loan (EIDL) directly from the SBA, they may have received an advance payment of up to $10,000 from the program. If a borrower also applied for a Payroll Protection Program (PPP) Loan, new guidance from the IRS makes it clear that the advanced payment will reduce any PPP amount that normally would have been eligible for forgiveness. Any remaining amount due on the PPP Loan after the reduction must be repaid by the borrower under the initial terms of the PPP Loan.
  • SBA FAQ DOCUMENT – Pages 10-11 are related to this topic of EIDL FAQs

EIP Update Highlights:

  • EIP FAQs Related to Double Payments
    • Eligible taxpayers who filed tax returns for either 2019 or 2018 will automatically receive an EIP of up to $1,200 for individuals or $2,400 for married couples. Parents also receive $500 for each qualifying child under the age of 17 as of the end of 2020.
    • The EIP amount is reduced by 5% of the amount that a taxpayer’s adjusted gross income exceeds: $150,000 for taxpayers filing a joint return; $112,500 for taxpayers filing as head of household; and $75,000 for all others.
  • EIPs FAQs Regarding Change in Eligibility Between 2018 and 2019.
    • Q21. Is the IRS continuing to issue EIPs based on 2019 tax returns individuals file in 2020?
      • A21. Yes, the IRS will continue to process 2019 tax returns and issue payments to individuals who have not already received a payment and have not already been determined to be ineligible based on their 2018 tax returns.If these individuals are determined to be eligible based on their 2019 tax returns, their payments will be issued shortly thereafter. The status will be reflected in the Get My Payment application.These individuals will receive information regarding the payments through Notice 1444, Your Economic Impact Payment, within a few weeks after the payments are made. This notice will be mailed to each recipient’s last known address and should be kept with their records.When filing their 2020 tax returns in 2021, these individuals can refer to Notice 1444 and claim additional amounts based on the 2020 tax returns if they are eligible.
    • Q22. If the IRS used a taxpayer’s 2018 tax return to determine the individual is not eligible for a payment, and the taxpayer later files a 2019 tax return that changes his or her eligibility, will the IRS issue a payment in 2020 based on the 2019 tax return?
      • A22. No. If the IRS has determined that a taxpayer was not eligible for a payment based on the taxpayer’s 2018 tax return, and then the taxpayer files a 2019 tax return that shows eligibility, the IRS will not issue a payment in 2020 based on the 2019 tax return. These taxpayers can claim amounts based on their 2020 tax returns in 2021 if they remain eligible for 2020.
    • Q23. If the IRS used an individual’s 2018 tax return to determine the amount of the individual’s payment, and the individual later files a 2019 tax return that indicates the individual is eligible for a higher amount, will the IRS issue an additional payment for the difference?
      • A23. No. If an individual hadn’t filed a 2019 tax return or the return had not been processed at the time of the IRS determination, the IRS used the information from the individual’s 2018 tax return to issue the payment.If an individual received a payment that is less than the full amount to which the individual is entitled, the individual will be able to claim an additional amount based on his or her 2020 tax return when the individual files it in 2021.
  • Economic Impact Payment Information Center – Visit this page for additional details.

BLS will continue to send important updates as information becomes available. Please be sure to visit our COVID-19 Resource Center for additional details and past communications. Reach out to your BLS Team Member or email us at info@belfint.com with any questions.

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