My wife has an LLC operating as an SCorp and she’s the only employee in her business. She’s only been in business for 2 years. In both years the business has operated at a net loss and thus she has not had to do payroll.

Does anyone know if she would qualify for the EIDL grant, the PPP loan, or unemployment?

Having a hard time finding out what she would qualify for based on her unique situation.

TIA

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Posted by baldona

Florida

Member since Feb 2016

20514 posts

Posted on 4/5/20 at 9:22 am to Neil Caffrey

quote:
Having a hard time finding out what she would qualify for based on her unique situation.

Does she have profits in her future? Sounds like she could be deemed a hobby if she doesn’t have something to show future income potential. Why is she at a net loss? Is she over paying herself? What’s her profit before taking distributions? Or are you saying she isn’t paying herself at all.

Eta: if she isn’t paying herself at all and taking losses, I don’t see how she qualifies for anything but maybe the EIDL. But I’d plan on it being a low interest loan. Hard to argue she lost income when she doesn’t have any.

This post was edited on 4/5/20 at 9:24 am

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Posted by Fat Bastard

coach, investor, gambler

Member since Mar 2009

72993 posts

Posted on 4/5/20 at 11:46 am to Neil Caffrey

quote:
Having a hard time finding out what she would qualify for based on her unique situation.

it is tricky if she is not a straight 1099/SP/IC and does not have a normal W2 job.

however, if she is taxed as a s-corp, she should have a W2 and be paying FUTA/SUTA taxes on the salary side. but you say she has not been taking a salary? and leaving it all in the dividend/distribution side? I think you COULD be screwed there. If she had been taking a salary paying the FUTA/SUTA tax on the W2 side maybe better off?

If she is the sole owner/shareholder I am not even sure you can lay yourself off even if you had an unemployment account setup with LA works. Maybe your CPA can help you out. I never had to even consider this with my old S-corp. I am starting a new one now though. It would be good info to know. I will ask my CPA when i see her in a few days once she finishes my taxes.

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Posted by LSUFanHouston

NOLA

Member since Jul 2009

37157 posts

Posted on 4/5/20 at 12:09 pm to Neil Caffrey

quote:
Does anyone know if she would qualify for the EIDL grant,

Probably, if she can show a loss of revenue

quote:
the PPP loan

No, as she has no wages, and she has no net income

quote:
or unemployment?

Maybe. But if her net profits are zero, I don't know how that would work.

The intention of these programs is to replace revenue so you can keep paying your bills and paying yourself/your employees. If she's never taken a dime of salary or distributions, she has nothing to replace, and thus, no ability to get money to replace it. If she has expenses she can no longer pay because of a drop of revenue, that's where EIDL would come in.

As a side note, 2 years of not working and she's not cash flowing enough to pay herself SOMETHING? What's happening here? I'm hearing a much bigger issue may be at play.

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Posted by ValZacs

Zachary/Valpo

Member since Jan 2009

284 posts

Posted on 4/7/20 at 11:20 am to Neil Caffrey

quote:
Does anyone know if she would qualify for the EIDL grant, the PPP loan, or unemployment?

She will not qualify for the PPP, that is based on payroll. (someone correct me if i am wrong here)
Not sure about EIDL, but i would imagine, just go to sba.gov and check.
Unemployment rules were modified to allow many who never qualified before to do so now. My understanding is it has been left up to each state as far as how to handle the 'bending of the rules', but 1099 people and many more should now qualify. Check the state workforce site.

This post was edited on 4/7/20 at 11:22 am

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