Iowa small business relief program launched
Financial assistance and tax deferral available to eligible small businesses affected by COVID-19
On Monday, Gov. Kim Reynolds announced the launch of a new Iowa Small Business Relief Program that will provide financial assistance to small businesses that have been economically impacted by the COVID-19 pandemic.
The program offers eligible small businesses grants ranging from $5,000-$25,000 in addition to offering Iowa businesses a deferral of sales and use or withholding taxes due and waiver of penalty and interest.
“Small businesses are the source of thriving main streets and community pride across Iowa,” said Reynolds. “The Small Business Relief Grant Program is another way we can support our small businesses during this unprecedented time.”
To be eligible for a small business relief grant, eligible businesses must:
• Be experiencing business disruption due to the COVID-19 pandemic
• Have employed between 2-25 people prior to March 17, 2020
The Small Business Relief Grants will assist eligible businesses in maintaining operations or reopening business following the COVID-19 pandemic. The funds may not be used to pay debts incurred prior to March 17, 2020.
The Iowa Economic Development Authority will review grant applications for eligibility and will determine the grant amount by the level of impact including loss in sales revenue and employees. Notification of award decisions and disbursement of grant funds will be expedited.
The Iowa Department of Revenue will review each application as applicable, to determine if it is appropriate to grant a deferral of the eligible taxes and waiver of penalty and interest.
The dual application for grant assistance and tax deferral is available at iowabusinessrecovery.com.
The deadline for applications is March 31 at 12 p.m. The program may be restricted due to funding availability.
Unemployment insurance tax extension to assist small businesses
Gov. Kim Reynolds announced that first quarter unemployment tax payments that are due April 30 will be delayed until the end of the 2nd quarter, July 31. Eligible employers include those employers with 50 or fewer employees. Eligible employers also must be in good standing with no delinquencies in quarterly payments.
To qualify for the extension, the employer must be current on all quarterly tax payments before the 1st quarter of 2020 regardless of whether or not they are seeking an extension of tax payment. All employers must file Quarterly Employers Contribution and Payroll Report electronically by 4:30 on April 24 to avoid late report filing penalty.
Payments for Q1 would be due when Q2 payments are due, July 31, 2020. No interest or penalties will accrue for delayed payments for the eligible group. The extension of payment deadline without interest is not a holiday or forgiveness and the taxes will be due July 31, 2020. Employers still need to file their quarterly reports, which contain employee wage data necessary to compute benefit eligibility and amounts to be paid.
“More than 95 percent of businesses in Iowa, or 72,264 employers, have 50 or fewer employees. They employ a total of 417,536 Iowans, pay approximately $4.2 billion in wages. Providing an extension to paying unemployment insurance taxes will help the vast majority of employers during this difficult time,” said Director Beth Townsend, Iowa Workforce Development.
For an employer who elects to take advantage of the extension, please contact our Unemployment Insurance Tax division at either 1-888-848-7442 or by sending an email to Q1tax@iwd.iowa.gov. If an employer would like to request additional time to pay the tax, contact the Unemployment Insurance Tax Division. IWD recommends sending an email versus a phone call as there is a high call volume during this time that may lead to extended wait times. Employers must notify IWD of intent to delay payment by Friday, April 24th at 4:30 pm.