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Simplifying the Financial Changes from Coronavirus

Last Updated: 04/15/2020  

It can be difficult to keep up with all of the changes that have been occurring in our lives over the past few weeks.  We want our readers to focus their attention on the health and wellbeing of their families and themselves.  Therefore, our job over the next few days/weeks/months is to keep you informed with all the changes taking place in one consolidated location (this blog!).  We will continue to update this site as changes occur.
Please note, there is specific information for our clients' states in which they reside in.  

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Federal Tax Individual Filing Deadline:

Moved from April 15th to July 15th

Why should I wait to file?

  • You will likely owe money when you file your taxes and need those dollars in the short term to cover unanticipated expenses.
  • You don’t have the time or mental strength to complete taxes right now.
  • In light of the new circumstances, you want to hire a professional.

FUN FACT: The last day to make a 2019 IRA contribution is by the 2020 tax deadline, which is now July 15th!

State Tax Individual Filing Deadline:

Most states are moving from April 15th to July 15th.
Please click here to find your state specific updates.

Federal Student Loan Payments + Interest:

The U.S. Department of Education has granted a waiver of payments and interest until September 30, 2020.

  • The interest rate on all federally held student loans will be 0% until September 30, 2020.  Your account will automatically be adjusted.
  • The 0% interest rate will be applied to all federally held loans in any status (in school, in grace, in repayment, in deferment/forbearance, etc.).
  • All borrowers will automatically be placed on an administrative forbearance which will temporarily suspend monthly payments through September 30, 2020.
  • A borrowor ccan request to remove the forbearance at anytime and resume their payment schedule.
  • The waiver does not apply to private student loans.  For example, Sallie Mae and Navient are not federal student loans.  However, they are making similar offers to their borrowers.
  • If your income has fallen, you may want to consider an income-driven repayment program.

Federal Housing Measures:

Fannie Mae, Freddie Mac, or Federal Housing Administration (F.H.A.) loans owned mortgages have suspended foreclosures and evictions for at least 60 days, including foreclosures already in process.

  • To find out who owns your mortgage, click here.  Whatever your result, contact your loan servicer to confirm in the event you are in need for adjustments.  
  • Landlords are encouraged to pause evictions for renters at this time.

Utility and Service Providers:

Large internet companies have pledged to not terminate residential or small business customers who can’t pay their bills.  

  • They have also pledged to not charge late fees for those who cannot make their payments on time.
  • Click here for a list of providers making this pledge.  We also encourage you to look up your specific internet and phone service provider for their specific offering.
  • Various Water Service Providers across the US are pledging to not shut off water for those who cannot afford payments during this time.
  • For example, our hometown in Rochester, MN stated they will not shut off residential or commercial electric/water service until further notice.  Click here for more details.

Unemployment:

Unemployment is a state run program.  However, the CARES Act increased benefit amounts and timeline for those who qualify.

  • Under the CARES Act, federal funding has issued a $600/week unemployment benefit amount for those who file and qualify.  This is on top of whatever amount you qualify for with the state you work in.
  • As of this writing, the $600/week federal unemployment benefit will last until the end of July, 2020.
  • Under the CARES Act, federal funding has also issued an extension of your state provided benefit program by 13 weeks.  For example, in MN, the longest you can claim unemployment for is 26 weeks.  With the extension, you may now qualify for an additional 13 weeks for a grand total of 39 weeks (just under 10 months).

MN Unemployment:  
On March 16, 2020, Minnesota Governor Tim Walz issued an executive order making applicants eligible for unemployment benefits if:

  • A healthcare professional or health authority recommended or ordered them to avoid contact with others.
  • They have been ordered not to come to their workplace due to an outbreak of a communicable disease.
  • They have received notification from a school district, daycare, or other childcare provider that either classes are canceled or the applicant’s ordinary childcare is unavailable, provided that the applicant made reasonable effort to obtain other childcare and requested time off or other accommodation from the employer and no reasonable accommodation was available.

Indiana Unemployment
New York Unemployment
Utah Unemployment  
Wisconsin Unemployment

Paid Leave:

Qualified workers get two weeks of paid sick leave and twelve weeks of paid leave to people caring for children whose schools or child care providers are closed due to COVID-19.

  • If you are ill, quarantined, seeking diagnosis or preventative care for COVID-19, or if you are caring for sick family members, you may qualify.
  • You must have been employed for 30 days.
  • You must work at a company with less than 500 people to qualify.
  • Places with fewer than 50 employees are included, but the Labor Department could exempt small businesses if providing leave would put them out of business.
  • Employers on the ‘front line’ can also decline to give leave to workers in the crisis.
  • People who are part time can also qualify.
  • If you are self employed, including those in the gig economy, can also receive paid leave if they pay taxes.
  • You can earn up to your full amount with a maximum payment of $511/day.
  • For those caring for a sick family member or whose child is out of school or day care can earn up to two-thirds usual pay, with a daily limit of $200.
  • After April 2, you can notify your employer of your required leave to start collecting your payments.

Lending Options for Small Businesses:

Natalie recently wrote a piece that expands on these options and more, click here to access that article.

Small Business Association (SBA) Loans:  

  • Companies with up to 500 employees can apply online here.
  • The maximum a business can borrow is $2,000,000.
  • The interest rate is 3.75% for small businesses and 2.75% for non profits.
  • Funds may be used to pay for ongoing business expenses (payroll, overhead, debts).  

Company and Lender Examples:

  • US Bank is offering a $5,000 to $250,000 “Quick Loan,” that ranges from 12 to 84 months at an interest rate 2% lower than the standard rate for which the business would qualify.
  • Amazon created the $5 million Neighborhood Small Business Relief Fund that supports small businesses in Seattle and Bellevue.  The fund is specifically designed to help the small businesses that have a significantly reduced amount of foot traffic within their space due to the coronavirus outbreak.
  • Facebook has created a $100 million small business grant program.  Click here for details.
  • Check your local banks and businesses to see what is being offered near you!

City Options:

  • Rochester, MN - Small businesses with 25 employees or less are eligible for up to a $25,000 loan paid over 36 months at 1% Interest.  The loan can only be used to offset payroll expenses.  If the loan is paid back within 6 months of the state emergency ending, then no interest will need to be paid.  
  • New York, NY - New York City is offering businesses affected by the COVID-19 outbreak interest-free loans up to $75,000. These loans come with a repayment term of 15 to 20 years. It’s also offering grants to help employers avoid laying off workers.
  • Chicago, IL - Chicago started a $100 million Chicago Small Business Resiliency Fund in response to the coronavirus. You can apply for up to $50,000 based on your business’s revenue with loan terms as long as five years.

Statewide Options:  

  • Minnesota - Minnesota Department of Employment and Economic Development (DEED) created Small Business Emergency Loans that range from $2,500 to $35,000 and “will be based on the firm’s economic injury and the financial need.”  The loan is interest free and must be paid back monthly over 5 years.  The first payment will be deferred six months with potentially partial forgiveness!  Businesses that qualify are those that are “directly and adversely affected by the conditions that precipitated the emergency declaration as noted in Executive Orders 20-04 and 20-08.”  

Other Options That Have Always Been Around:

  • Business credit cards offering limited time 0% APR (usually for the first 9-20 billing cycles). Here is a list of some options available.
  • Business term loan with a local bank.
  • A business line of credit if you don’t know how much you’ll need, but want quick access available for when/if the time comes.

Disclaimer:  This article is for informational purposes only and is not a recommendation of Fyooz Financial Planning, Natalie Slagle CFP®, or Daniel Slagle CFP®. Past performance may not be indicative of future results and may have been impacted by events and economic conditions that will not prevail in the future. Therefore, it should not be assumed that future performance of any specific security, investment product or investment strategy referenced in the article, either directly or indirectly, will be profitable or equal to the corresponding indicated performance level(s). No portion of the article shall be construed as a solicitation to buy or sell any specific security or investment product or to engage in any particular investment or financial planning strategy. Any reference to a market index is included for illustrative purposes only, as it is not possible to directly invest in an index. Indices are unmanaged, hypothetical vehicles that serve as market indicators and do not account for the deduction of management fees or transaction costs generally associated with investable products, which otherwise have the effect of reducing the performance of an actual investment portfolio.

Natalie Slagle
Founder, Fyooz Financial
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