- Targeted EIDL Advance seeks to replace old EIDL Advance
- Who qualifies and how to apply
- Is the Targeted Advance taxable?
The Economic Injury and Disaster Loan (EIDL) is a decades-old disaster relief fund. Originally capped at $2 million, the early days of the pandemic soon exhausted loan funds. Now, the Targeted EIDL Advance seeks to balance out previous advances and provide aid to companies that did not maximize benefits from the first round.
What Are The Eligibility Standards?
- Prior applicants for the original EIDL
- Businesses located in low-income communities
- Demonstrated loss of 30% or more in gross receipts during any 8-week period after March 2, 2020
- Small businesses, sole proprietors, independent contractors, and private not-for-profit organizations with 300 or fewer employees
The SBA will be reaching out to qualifying businesses via email with instructions on applying and determining eligibility.
How Will It Work?
- First priority group: Businesses and nonprofit organizations that previously received a partial EIDL Advance of less than $10K
- Second priority group: Businesses and nonprofits that previously applied for EIDL (prior to Dec 27, 2020) but did not receive a loan because there was no more funding left
Will It Be Taxed?
The IRS released a notice stating that EIDL Advances and forgiven EIDL funds will be exempt from taxes. Additionally, typical business expenses paid for with EIDL loan or EIDL advance funds are tax-deductible.
Some states, however, have not elected to follow the federal precedent, so the loan’s exempt status and the deductibility of expenses will vary per state. Fortunately for NYS businesses, New York follows federal tax treatment.
When Will Loan Repayment Start?
The SBA announced earlier last month that all disaster loan payments would be postponed until 2022. Unlike PPP loans, which have the possibility of being forgiven, EIDL loans must be paid back with interest.
For more information and assistance with your business’ EIDL, call our office at 516-541-6549 to speak with a qualified advisor on our Coronavirus Response Team (CRT).