Although there are several relief programs available for Americans impacted financially by the COVID-19 pandemic, most are for employees.
It was amazing news, then, to find out that independent contractors and the self-employed may qualify for, among other programs, unemployment benefits.
If, that is, you can get through to the unemployment office to sign up.
If you’ve started getting flashbacks to your rookie days, when you lived for the day you’d get your next commission check, read on to learn more about the various types of financial assistance for real estate agents.
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Unemployment insurance for real estate agents
A whopping 30.3 million Americans have applied for unemployment insurance benefits since the advent of the pandemic.
The CARES Act, short for the Coronavirus Aid, Relief, and Economic Security Act, is the government’s way of providing financial relief to small business owners, independent contractors and other self-employed individuals.
Each state is given latitude in how they implement Pandemic Unemployment Assistance, or PUA for short. Some states are still not set up to accept these claims, but that doesn’t mean you don’t qualify.
Keep checking back on your state’s website. The U.S. Department of Labor offers a handy tool to help you find your state’s unemployment offices at dol.gov.
If you’ve taken a side gig to tide you over, you may not qualify for financial assistance for real estate agents.
PUA offers up to 39 weeks of unemployment benefits and you will receive them retroactively from when your “unemployment” began.
Consider a small business loan when looking for financial assistance for real estate agents
Talk about a ca-ca show! Round one of the CARES Act Paycheck Protection Program was a complete mess.
Created specifically to incentivize small business owners to keep employees on the payroll, round one of disbursements for the forgivable loan program went to only 5 percent of the nation’s small businesses, according to Michael Guta with SmallBizTrends.com.
The rest of the billions went to various and large public companies like Ashford Hospitality Trust (a REIT), Ruth’s Chris Steakhouse, Shake Shack and others.
Round two seems to be running as intended, with about $175 billion in loans granted so far.
Ideal for the higher-earning agent with a staff, the application process is a bit of a hassle, but well worth the effort if you are super short on cash.
“The program is designed to get cash into the hands of suffering small businesses quickly, with less red tape and fewer guardrails than the SBA’s existing loan programs,” according to Aaron Gregg at WashingtonPost.com.
Get details on the Paycheck Protection Program and learn if you qualify at SBA.gov.
Thinking about dipping into your retirement funds?
We aren’t accountants or financial planners but we did our due diligence and have found out that raiding your retirement funds to help tide you over until the real estate industry heats up again has its pros and cons.
There was a time when an early disbursement of funds came with a penalty. Today, there is a bit more leeway in the form of what is known as a “hardship distribution.” Take up to $100,000 penalty free.
Yes, you’ll still pay taxes on the money you take, but the CARES Act lets you not only spread out the tax payments but the repayment of the money withdrawn over three years.
“The new withdrawal rules apply to most retirement accounts, such as 401(k) accounts, 403(b) accounts and IRAs,” according to Sarah Skidmore Sell with the Associated Press.
“The rules are fairly broad in terms of who qualifies: anyone who has been diagnosed with the virus or has otherwise experienced related adverse financial consequences,” she adds.
Sells lists some of the disadvantages to raiding your retirement funds:
- Tax on withdrawals can be quite expensive, “… even if spread out over time.”
- Many are unlikely to pay back the withdrawals.
- You’ll be taking money out of the market at a low point.
“The biggest consequence of withdrawing money from your retirement plan is that you are losing out on that money compounding,” Mitch Goldberg, financial advisor tells Sharon Epperson at CNBC.com.
If you’re having trouble making up your mind which way to turn regarding financial assistance for real estate agents, run some scenarios by your financial planner or accountant. Hey, they can use some business right now too.
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