Making a Scene Presents a primer for the PPP and PUA Programs for the Indie Artists
A lot musicians have not taken advantage of some of the options available to them when it comes to using the CARES act to get the financial help they need. Most of that comes down to not understanding what is available and how to access it. Let’s take a look at the two prevailing programs and see which one is best for you and how you can apply for those benefits.
Paycheck Protection Program (PPP)
What is it?
If you have filed with the IRS as a independent contractor or sole proprietor of your music business in 2019 tax returns, then you can apply for this program. This is a direct “Loan” from the federal government to help businesses keep their employees by giving them money to help them meet payroll. As an independent contractor or sole proprietor you can pay yourself a salary under this program. This load can be “forgivable” if you apply for that status, the loan is less than $150,000 and you adhere to their rules of using it for payroll protection. The one problem with this program is that is a first come first serve basis and unfortunately the last go around many companies that did not need the help took the money and ran. The enrollment period began on 1/11/21 and will end 3/31/21, so if you qualify for this program, make it a point to apply for this ASAP!
How to Get it?
You need to apply directly through your bank that has your account for your music business. It is important to Have an established relationship with your bank which will get you higher priority. Contact your local branch and let them know you want to apply for a PPP loan and go from there.
How Much Can I Get?
It’s really not complicated. Take your 2019 IRS Form 1040, look at schedule C line 31, your net profit. You would then divide that number by 12 and then multiply that by 2.5.
Schedule C Line 31 = $48,000
$48,000/12 = $4,000
$4,000 x 2.5 = $10,000 PPP funding amount
Can I still work and Make Money?
The short answer is Yes, the idea of the PPP is to allow businesses to continue to stay in business with help for their payroll and keep their employees. As a sole proprietor, you can pay yourself a salary while you stay in business. I would always suggest you consult with your accountant for professional guidance and maintaining the requirements to have the loan forgiven.
Can I apply again this year if I got a PPP last Year?
Pandemic Unemployment Assistance (PUA)
What is it?
The PUA allows “Gig” workers to apply for unemployment from their state governments. On March 18, 2020, The Families First Coronavirus Response Act (FFCRA) was signed into Law, which provided additional flexibility for state unemployment insurance agencies and additional administrative funding to respond to the COVID-19 pandemic. The Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law on March 27. It expands states’ ability to provide unemployment insurance for many workers impacted by the COVID-19 pandemic, including for workers who are not ordinarily eligible for unemployment benefits.
How do I get it?
To receive unemployment insurance benefits, you need to file a claim with the unemployment insurance program in the state where you worked or live. Depending on the state, claims may be filed in person, by telephone, or online. You should contact your state’s unemployment insurance program as soon as possible. If you worked in a state other than the one where you now live or if you worked in multiple states, the state unemployment insurance agency where you now live can provide information about how to file your claim with other states. To make sure your claim is not delayed, be sure to give complete and correct information.
How Much Do I Get?
That would be up to your state to determine what your unemployment benefits will be plus what the stimulus PUA payments will be from the federal governments stimulus package.
Can I still Make Money?
Unlike the PPP, if you make any money while receiving the PUA payments you MUST report that income so it can be deducted from your benefits. That means if you do a live stream and receive tips for that performance, those monies are subject to being reported as income while you are receiving PUA payments.
How Long Can I get these Benefits?
Once you are approved for benefits under the PUA you are entitled to 39 weeks of payments which can be extended for additional 13 weeks once they run out. So as of now you can receive up to 52 weeks in total.
This is not built to be a detailed writeup of these programs but instead a simple breakdown of the current programs that you as a indie artist can access to find financial relief during these trying times. With the PPP seek out and take to heart the advice of your bank as to the best way to apply for loan forgiveness. With the PUA, this is deferred to your states Department of Labor and their unemployment office. As with any move that involves money from the government, always seek and take expert advice!