Tax expert gives guidance on 2021 returns for small businesses with pandemic support

    (Photo: Getty Images)
    (Photo: Getty Images)

    Citizens that haven’t received their federal stimulus check or missed the November deadline to apply can still declare it on their taxes for next year, tax expert Amy Paz said today.

    Paz spoke at a weekly press conference held by Fabian Bedne, who works on the staff of Nashville Mayor John Cooper. Bedne targets his information to the area’s immigrant community.

    “When you present your tax declaration in 2021, there will possibly be a question about whether or not you received it…that way the government can return whatever additional money they still owe you,” said Paz.

    Contrary to a commonly held belief, the stimulus funds are not required to be paid back, added Paz.

    Money that has been received in error must still be returned to the IRS and dependents claimed by non-custodial parents must also be factored into what is owed to the IRS. 

    Businesses that received Economic Injury Disaster Loans (EIDL) are required to be paid back.  The EIDL program gives small business owners and nonprofit organizations affected by COVID-19 loss of revenue the opportunity to apply for loans from the Small Business Administration. Loans come to term in 30 years with a fixed interest rate of 3.75%. The funds had to specifically be used for operation costs of the business, and not for any other reason. The IRS has authority to audit the business if it is found to have violated the terms of the loan.

    “If you received this loan and you might not need it, have it only for emergencies or end up not using it, you can return it completely before the term begins to pay it back,” Paz said.

    A separate program, EIDL Advance, offered business owners $1,000 per employee up to a maximum of $10,000 and the government does not require the money to be repaid. 

    Businesses that applied for Paycheck Protection Program (PPP) loans will need to pay it back or apply for loan forgiveness. If the loan is not forgiven, interest will be charged and must be paid back. Those who received the loans before June 5 have two years to repay, and those who applied after have five years to repay.

    Businesses were originally given eight weeks to use PPP funds but this was extended to 24 weeks, during which recipients can still qualify for loan forgiveness before the deadline for payments.