COVID19 RESOURCE GUIDE Since the outbreak of COVID19

COVID-19 RESOURCE GUIDE Since the outbreak of COVID-19 things have been changing by the day. One of the best things you can do for your business is to stay informed with all these changes. If you have any questions or need help filing call 734 -464 -3660

UNEMPLOYMENT FILING SCHEDULE

UNEMPLOYMENT UPDATES • Expanded Unemployment Benefits to: • • • Sick Workers Caring for Loved Ones First Responders Self-Employed Low Wage Employees Contractors • If you applied you do not have to reapply and those about to apply do not need to take additional steps and should file as usual.

UNEMPLOYMENT UPDATES • Benefits Extended to Self-Employed, Low-Wage, and Other Workers Affected by COVID-19 • Individuals who are not already eligible for Michigan’s unemployment programs will now be provided a set amount of $600 a week for up to four months on top of the state benefit. Benefits are available for up to 39 weeks • As of April 10 th, Workers already on unemployment should start to see the extra $600 from federal funding on top of their State Benefits. • Benefits Increased for All Unemployed Workers • Weekly benefits for all unemployed workers will be increased by a set amount of $600 a week for up to four months • The eligibility window to apply has also been increased from 14 to 28 days from the date of their work stoppage. • Claims will be back-dated to reflect the date in which a claimant was laid-off or let go from their job due to COVID-19. • Apply Online Here or call 1 -866 -500 -0017 • Best time to apply is between 8: 00 pm – 8: 00 am

UNEMPLOYMENT FOR SELF-EMPLOYED , 1099 -CONTRACTORS, AND GIG WORKERS • Starting Monday April 13 th • Applications will be in place for the Self-employed, 1099 -Contractors, and Gig workers • These workers will start to receive the State and Federal benefits as early as April 20 th • Self-employed workers, gig workers, 1099 -independent contractors and low-wage workers who have previously applied for unemployment benefits and have been denied should login to their Mi. WAM account to complete the next steps for PUA federal benefits. These steps will also be emailed to workers. They should not file a new claim, as that may delay the time it takes to get their benefits • The UIA says that every eligible worker will receive their benefits. • The UIA will be accepting claims and benefit applications back-dated to reflect the date on which the claimant was laid-off due to COVID-19, beyond the previously established 28 -day period ($600 federal payment is only retroactive back to March 28).

STIMULUS CHECKS • Tax filers with adjusted gross income up to $75, 000 for individuals and up to $150, 000 for married couples filing joint returns will receive the full payment. • Parents also receive $500 for each qualifying child (under 17 years old). • The payment amount is reduced by $5 for each $100 above the $75, 000/$150, 000 thresholds. Single filers with income exceeding $99, 000 and $198, 000 for joint filers with no children are not eligible. • Who is not eligible for a check: • Children 17 to 18 years old • Many College Students 19 -23 • Nonresident Aliens • Adults claimed as dependents • Estates • People that have not filed 2018 and 2019 returns

STIMULUS CHECKS FAQ • What if I am not required to file a tax return. Can I still receive my payments? • Yes. People who typically do not file a tax return will need to file a simple tax return to receive an economic impact payment. Low-income taxpayers, senior citizens, Social Security recipients, some veterans and individuals with disabilities who are otherwise not required to file a tax return will not owe tax. • How can I file the tax return needed to receive my economic impact payment? • IRS. gov/coronavirus will soon provide information instructing people in these groups on how to file a 2019 tax return with simple, but necessary, information including their filing status, number of dependents and direct deposit bank account information. • I have not filed my tax return for 2018 or 2019. Can I still receive an economic impact payment? • Yes. The IRS urges anyone with a tax filing obligation who has not yet filed a tax return for 2018 or 2019 to file as soon as they can to receive an economic impact payment. Taxpayers should include direct deposit banking information on the return. • I need to file a tax return. How long are the economic impact payments available? • For those concerned about visiting a tax professional or local community organization in person to get help with a tax return, these economic impact payments will be available throughout the rest of 2020. • The IRS does not have my direct deposit information. What can I do? • In the coming weeks, Treasury plans to develop a web-based portal for individuals to provide their banking information to the IRS online, so that individuals can receive payments immediately, as opposed to checks in the mail

STUDENT LOAN RELIEF • Interest will not accrue on federal student loans from April through September 30 and no payments must be made • Even though payments are suspended during this time period, the Department of Education will treat it as if the borrower made a payment toward public service loan forgiveness or other forgiveness programs • Borrowers who are in loan rehabilitation programs will also have the suspension period count toward rehabilitation. These programs are for borrowers working to pull their loans out of default. • Credit reports and scores will not be impacted during the suspension of payments period • Wage garnishment and tax refund seizures will be halted during the forbearance period

SBA SMALL BUSINESS LOANS BASICS • Originally it was believed that small businesses were only allowed to take one of the SBA loans • That has changed! You can apply for both loans as long as you do not use the funds from each loan on the same expenses. • If a business uses money from the economic injury disaster loan program to cover payroll, it can try to refinance it through the paycheck protection program and be eligible forgiveness

SBA PAYCHECK PROTECTION PROGRAM • Rate to be determined by case. Max rate = 4% Starting rate = 1% • Loan amount up to $10 million • Each loan is subject to payroll-based cap of 2. 5 times historical average monthly payroll cost • Max loan term of 10 years • Who is Eligible? Each business that was existing and paying payroll and payroll taxes on or before February 15, 2020, with no more than 500 employees, can apply for the new Payroll Protection Loans • Individuals that operates under a sole proprietorship, self-employed, or independent contractor are also eligible • Forgiven Amount- Max of 8 weeks of payroll, mortgage, interest, rent, and utility cost to payroll and operating expenses (due to likely high subscription, at least 75% of the forgiven amount must have been used for payroll) • P&I payments deferred for at least 6 months but no more than 1 year • Applied though an approved SBA lender • Is your bank struggling to keep up with all the loan applications? • Try kabbage. com • Kabbage. com has partnered with local banks to help with the overflow of applications

SBA PAYCHECK PROTECTION PROGRAM GUIDANCE • The PPP application launched on 4/3/20. Further guidance was issued after the launch of the application. • Payroll cost includes: • • • Salary, wage, commission or similar up to $100, 000 • Cash tips or equivalent • Payment for vacation, parental, family, medical or sick leave • Dismissal or separation allowance • Group health care benefit payments (including insurance premiums) • Retirement benefits • State and local taxes (based on employee compensation) Payroll cost doesn’t include: • Any salary in excess of $100, 000 • Income tax, payroll tax or railroad retirement tax • Compensation for employees not based in the U. S. • Sick leave or FMLA leave for which a credit is available under the FFRCA How do I calculate my payroll costs if I am self-employed? • The Cares Act says that you can claim your “wage, commission, income, net earnings from self-employment or similar compensation, ” up to $100, 000 a year.

SBA PAYCHECK PROTECTION PROGRAM GUIDANCE • Payment Schedule: • The first payment is due after 6 months, while the loan must be fully repaid within 2 years if it isn’t forgiven. • You are allowed to pay the loan off before the 2 year deadline • What Do Businesses Need to Ensure the Loans Are Forgivable? • Loans will be fully forgiven if all employees are kept on payroll for eight weeks, and the loan is used only for: • Payroll costs (up to $100, 000 per employee) • Mortgage interest • Rent on lease • Utilities • How to request loan forgiveness • You can submit a request to the lender that is servicing the loan. The request will include documents that verify the number of full-time equivalent employees and pay rates, as well as the payments on eligible mortgage, lease, and utility obligations. You must certify that the documents are true and that you used the forgiveness amount to keep employees and make eligible mortgage interest, rent, and utility payments. The lender must make a decision on the forgiveness within 60 days. • Your loan will not be forgiven if… • Number of Staff: Your loan forgiveness will be reduced if you decrease your full-time employee headcount. • Level of Payroll: Your loan forgiveness will also be reduced if you decrease salaries and wages by more than 25% for any employee that made less than $100, 000 annualized in 2019. • Re-Hiring: You have until June 30, 2020 to restore your full-time employment and salary levels for any changes made between February 15, 2020 and April 26, 2020.

SBA PAYCHECK PROTECTION FORGIVENESS GUIDANCE • What if my employees want to stay on unemployment? • Previously laid off employees who choose not to return to payroll won’t be counted against you - but you must document • The employer must have a written offer rehire and a written rejection of that offer by the employee. The employer must have offered to rehire for the same salary/wage and number of hours as before they were laid off. • Employees and Employers should be aware that employees who reject offers of re-employment may forfeit eligibility for unemployment benefits. • Are the expenses that are forgiving deductible? • As of May 5, 2020 Congress is in the process of determining if expenses paid with money from the PPP loan will be deductible. • Originally the IRS said that the expenses that result in forgiveness will not be tax deductible because the loan itself is not taxable income.

SBA PAYCHECK PROTECTION FORGIVENESS GUIDANCE • Allows the borrower to choose their own eligible 8 -week period of payroll expense forgiveness (not utilities or rent/mortgage interest) • 8 -weeks from the day that the borrower receives the loan proceeds into their account • 8 -Weeks that align with your first normal bi-weekly or more frequent pay period that follows the date that the loan proceeds were received • For employees who make more than $100, 000 in annual compensation, they can only claim up to $15, 385 (does not include benefits or state taxes) • Full Time Equivalent (FTE) calculation simplified forgiveness • Full time employees can be assigned a 1 and part-time employees (regardless of hours worked each week) can be counted as. 5 • Owner's compensation cannot be increased from 2019 levels (cap still applies $15, 385)

PPP FORGIVENESS FOR SOLE PROPRIETORS AND INDEPENDENT CONTRACTORS • PPP forgiveness works differently for sole proprietors and independent contractors, the biggest difference being the concept of “owner compensation replacement” which greatly simplifies the loan forgiveness process • Owner compensation replacement • Instead of spending your funds on payroll, you can automatically get eight week’s worth of net profit forgiven, without having to spend it on anything. This is called “owner compensation replacement” • “Owner compensation replacement” forgiveness is calculated by multiplying your reported net income in 2019 on your Schedule C by 8/52 (or 0. 154)

PPP FORGIVENESS FOR SOLE PROPRIETORS AND INDEPENDENT CONTRACTORS • Forgiveness calculation example using Company X: • Schedule C for 2019 reported that Company X had a net income of $27, 000 • Monthly “payroll cost” would be $2, 275, so you qualified for $5687. 50 in PPP funding • To calculate your maximum owner compensation replacement, you would multiply $27, 300 by 8/52 • $27, 300 * 8/52 = $4, 200 • The $4, 200 would be fully eligible forgiveness. The remaining amount of your PPP loan ($1487. 50) would need to be spent on eligible expenses such as utilities, rent, and mortgage interest. • The updated guidance prevents self-employed individuals from claiming the entire amount as income replacement. • If you don’t have any eligible business expenses you can use the PPP funds for, the remaining balance of the loan will need to be repaid according to the PPP loan terms. At 1% interest for 2 years, it’s one of the best loan terms you can find, but there is no prepayment penalty if you wish to pay it all off early

5 STEPS TO MAXIMIZE YOUR PPP LOAN FORGIVENESS • Step 1: Track total eligible costs incurred and paid during the 8 -week period following the loan funding • Payroll costs • • Cash tips or the equivalent Payment for leave Allowance for separation or dismissal Payments for employee benefits Group health care coverage Insurance premiums Retirement contributions Payment of state and local taxes assessed on the compensation of employees • Mortgage interest on real or personal property • For mortgages in effect prior to 2/15/2020 • Rent under a leasing agreement • For agreements in effect prior to 2/15/2020 • Utilities • Includes payment for electricity, gas, water, transportation, telephone, or internet access. • Service must have been established prior to 2/15/2020

5 STEPS TO MAXIMIZE YOUR PPP LOAN FORGIVENESS • Step 2: Calculate payroll costs forgiveness floor • 75% of eligible costs are to be used on payroll • If less than 75%, the forgiveness is reduced by the amount under 75% • Step 3: Calculate any % decrease in full time employees from 8 -week covered period • For example, a 15% drop in FTEs results in a 15% decrease in the amount of the loan forgiveness. • Step 4: Calculate any reduction in payroll > 25% of prior quarter • For any employee who did not receive, during any single pay period during 2019, wages/salary at an annualized rate of pay more than $100 K and also employees whose primary place of residency is outside the US. • Was their payroll during the cover period more than 25% less that it was the previous full quarter? Reduce forgivable amount by the reduction that exceeds 25%.

5 STEPS TO MAXIMIZE YOUR PPP LOAN FORGIVENESS • Step 5: Calculate any adjustment because FTEs and salary/wages were restored by June 30 • If “restore” criteria are met, steps 3 and 4 are ignored. • Additional points to consider when tracking • Independent Contractors are NOT included • Many national payroll providers have developed PPP compliant reports to track both payroll and benefits • A separate PPP bank account may assist in tracking payroll costs

SBA ECONOMIC INJURY DISASTER LOAN • What if I already laid off my workers? • Your loan will still be forgiven as long as you hire them back before you receive the money. • Max loan size of $2 million with an interest rate of 3. 75% for businesses and 2. 75% for non-profits and a life up to 30 years • First payment due one year after loan origination date(interest is accrued during the deferment) • Who is eligible? businesses with 500 employees or less will be eligible to apply • Applicants that apply for this loan may request an advance of $10, 000 from the SBA. The advance will be distributed within 3 days. • On April 6 SBA implemented a $1000 cap per employee on the advance up $10, 000. • Due to the system being overwhelmed getting the advance within 3 days is no longer true. • Application process takes 2 -3 weeks plus an additional 5 days for funding • What can I use the money for? • The only thing the loan can not be used for is refinancing previous loans. Anything else is fair game.

EMPLOYEE RETENTION CREDIT • Eligible employers include employers whose operations were fully or partially suspended due to a COVID-19 government-mandated shut-down order, or employers whose gross receipts declined by greater than 50 percent when compared to the corresponding calendar quarter of the prior year • The refundable credit is applicable for all wages paid between March 12, 2020, and before January 1, 2021. The credit is computed on a calendar-quarter basis and equals 50 percent of qualified wages up to $10, 000 paid to each employee or $5, 000 in actual credit • Eligibility for the credit begins with the first 2020 calendar quarter in which the employer’s gross receipts declined by greater than 50 percent of the corresponding calendar quarter of the prior year, and ends with the calendar quarter following the calendar quarter in which the gross receipts exceed 80 percent of the corresponding calendar quarter of the prior year • Any eligible employer may elect out of the credit • This credit will not be available to any eligible employer that receives a loan under the Small Business Administration

MICHIGAN SMALL BUSINESS RELIEF PROGRAM • The Michigan Small Business Relief Program grants are administered by 15 local and nonprofit economic development organizations (EDOs) • Oakland County - A grant and loan are available. Applications must be submitted by April 6 th. More info • Wayne County- A grant and loan are available. • Grant application will go live in the first week of April. Grant Info • Loan Information • Loan Application • Macomb County- A grant and loan are available. Applications are due by April 3. • Apply for Grant and Loan here: There is one application, regardless of whether a business is applying for a grant or a loan. A business may receive a grant or a loan, but not both. • Other Counties pages can be found here

PAYROLL TAX DEFERRAL • Employer’s portion of Social Security payroll taxes with respect to wages paid in 2020 would be delayed. Specifically, 50% of an employer’s Social Security payroll taxes otherwise due after the date of enactment in 2020 would not be due until December 31, 2021, with the remaining 50% deferred until December 31, 2022 • A similar provision would apply to 50% of the Social Security portion of self-employment tax • The payroll tax deferral provisions would not apply to companies that take advantage of a loan forgiveness provision of the Bill relating to loans authorized by the Small Business Act