What you need to know after your CERTS grant is approved
|
|
|
Tracy Fickett of BusBooks, a CPA and MBA who works extensively in our industry, appeared on UMA's Town Hall today with a presentation that spelled out what operators can expect moving forward once they receive notice that they are approved for a CERTS grant. She also prepared an article for Bus & Motorcoach News to coincide with today's presentation. To view Tracy's slides from today or to watch the video presentation, use the links above.
|
|
Many of you may have already received notice that your company’s CERTS grant application has been approved. Some of your applications may still be in “Application Signed and Submitted — Under Review” status, which means that the U.S. Treasury Department is still reviewing the application.
Still others may find the status reading “Action Needed.” If that is your situation, look for an email from certs@treasury.gov to find out what is missing or needs to be addressed. Or call the helpline at 877-398-5862. Respond to the Treasury as soon as possible to get them what they need.
So, what’s next after the approved status? We wait until the Treasury has completed vetting all applications for all four eligible industries. Then the Treasury can develop the distribution formulas. At that point, an approved application status should be updated to “Application Approved — Grant Amount Pending.” Treasury will then post the industry allocation methodology and the grant sizing formula.
|
|
Watch for any communications from Treasury in case clarifications are requested
|
|
The application process is over. So, what's next? Here's the latest from the Treasury website:
Treasury is reviewing all CERTS grant applications submitted by the July 19, 2021 deadline. While Treasury is reviewing an application, the status code for the application in the CERTS portal will be “Application Signed and Submitted – Under Review.”
If Treasury has questions or requires clarification about an application, Treasury will contact the applicant with instructions for providing additional information or documents. In such cases, the status code for the application in the CERTS portal will be “Action Needed.”
Treasury will notify applicants when their application is approved (or if it must be rejected as ineligible for CERTS). However, an approved applicant’s grant amount may not be known until Treasury completes a quantitative analysis of the applicant pool to allocate CERTS funding across the four eligible industries and then to apply the grant sizing formula to each approved applicant. Therefore, the status code for approved applications in the CERTS portal will initially be “Application Approved – Grant Amount Pending.” Treasury will also post on this website the industry allocation methodology and the grant sizing formula.
Once an approved applicant’s grant amount is calculated, Treasury will send the approved applicant a Grant Agreement to sign electronically. The status code for the application will then be changed to “Grant Agreement Available for Signature.”
After the approved applicant electronically signs and returns the Grant Agreement, the status code in the CERTS portal will be “Grant Agreement Signed by Applicant.”
In the final step, Treasury will counter-sign the Grant Agreement and initiate a grant payment to the approved applicant. The status code in the CERTS portal will then be “Grant Agreement Signed by Treasury – Payment Initiated.”
Approved applicants should expect to receive an electronic grant payment in their bank account two to three business days after they return their signed Grant Agreement.
|
|
FAQ: Treasury answers UMA Member questions about CERTS program issues
Posted: June 25, 2021 - scroll for questions and answers as we will be adding to this list.
Contact info at Treasury: Treasury has set up a CERTS hotline. The telephone number is 877-398-5862 or you can send an email to CERTS@Treasury.gov.
Contact at UMA: You are always welcome to call (703) 838-2929 or email us here at UMA. Also, send us an email letting us know that you have made a confirmed submission. We have received dozens and love to hear the good news.
UMA is providing the following answers to common inquiries we have received here at UMA pertaining to CERTS. Please check the CERTS FAQ’s daily for frequent updates.
While we have made our best attempt at providing answers to common questions, any conflicting or incorrect information provided by Treasury certainly prevails.
1. Is anyone getting a fatal error on the CERTS app asking for "proof of student transportation"? We do not have school buses, nor did I put anywhere anything about school buses. NACIS code is 485510 - Charter. School bus is 485410. Could there be an issue here?
This issue was corrected last night, and UMA Members are now reporting successful submissions. Please try again.
2. I am still having trouble registering with ID.me!
Treasury has released a step-by-step guide with photos that should remedy the issue.
3.The application requests a 941 but our holding company does not have one. How do I satisfy the application requirement?
Treasury is currently making an allowance and will be updating the provision.
4. We are a small fleet operator, and all our drivers are 1099 employees? Should 1099 personnel be reported as employees?
No, however it is likely 1099 compensation will count towards your 60% payroll requirement. Look for additional clarification from Treasury as the update the FAQ’s.
5. Will UMA, through communications with Treasury, be able to monitor or report the statistics related to the volume of CERTS submissions?
Most likely yes. Very early preliminary number indicate approximately 1,300 applications; approximately 400 of those applications are reported complete. The overwhelming majority of applications so far are from motorcoach companies.
6. Does the question regarding unemployment payments refer to the owner applying for CERTS funds or to the owner’s employees?
The only time an applicant will receive this question id if the indicate they are a sole proprietor. Sole proprietors must disclose the total amount of Federally funded unemployment benefits they have received, if any, in response to COVID-19. Sole proprietors do NOT need to disclose the receipt of traditional Unemployment Insurance benefits funded by a state government.
7. How do we report paying employees through a professional employer organization (PEO)?
Companies that do not have an IRS Form 941 to upload in their own name and TIN because they use a third-party payroll processor or PEO must complete and upload a standard form letter in lieu of an IRS Form 941. The form letter must be completed and signed by an authorized representative of the third-party service provider. The form letter is available here for download. NOTE: This question is now answered in the updated FAQ’s.
8. Will my previous federal aid (PPP, EIDL) reduce the amount I am eligible under CERTS?
Not likely. The primary purpose in requesting the amount of previous federal aid is to conform with the Congressional mandate to ensure that your total revenue and federal aid in 2020 do not exceed your 2019 revenue.
9. How would a company who has 2 corporate entities with the same ownership submit? Company A is the equipment holding company and company B is the operating company. The buses (and debt) is owned by company A who leases them to company B which is the operating company and holds all the revenue. Since the application is asking for both revenue loss as well as debt, should the applicant use the affiliation to show that they are really the same corporate entity? In this instance, there is no umbrella holding company and both companies tax returns reflect the same ownership and being reported on the owner’s tax return.
Treasury advises to report debt under the operating company.
10. Under PPP input - it only allows for one PPP application number. If we received both rounds of PPP, do we put the total amount and just one app number? Or just one app number and 1st round amount?
All amounts received from PPP and EIDL must be reported as federal assistance. There is no distinction between “forgiven” or “loan”.
11. What if my second round of PPP was not funded until 2021?
You must report all Federal assistance received prior to your submission for CERTS aid including any federal assistance received in 2021.
12. Do I report all the EIDL (grant and loan)?
Yes
13. I paid off my EIDL in full when I received a Main Street Lending Program loan. Do I still report the EIDL? Main Street Lending Program?
Yes, the EIDL assistance must be reported; however, the loan under the Main Street Lending Program is not considered federal assistance and is not reportable.
14. Are CERTS funds received be considered taxable income?
Yes, grant funds are considered taxable income on your federal tax return.
15. Our company’s fiscal year ends June 30, 2021, so we have not filed yet and unlikely we can have everything prepared to file with IRS BEFORE THE CERTS submission deadline. Complicating the matter further is the fact that in calendar year 2020 our revenue loss is substantial when compared to calendar year 2019. Inasmuch as the spring in 2021 reflects some recovery our FY year 2020 will not truly reflect our actual 2020 calendar year loss. It seems unfair to “penalize” a company simply because their fiscal year filing is different.
Treasury is taking this under advisement and will advise their decision under the FAQ’s.
16. How soon can I expect to receive funds?
Ideally, Treasury would like to disburse funds as early as late July or early August. You can help by submitting now or as early as possible as they are already reviewing the applications. As the applications are approved, you will receive an email notification.
17. How much will I receive?
That is unknown at this time as Treasury anticipates the program will be oversubscribed and they must wait until the period for submissions has ended (11:59 PM EST, July 19, 2021) to determine how funds will be distributed.
18. Is there any provision for making submissions after July 19?
No, not at this time. It would likely be unwise to procrastinate.
19. What if I get stuck?
Treasury has set up a CERTS hotline. The telephone number is 877-398-5862 or you can send an email to CERTS@Treasury.gov.
Of course, you are always welcome to call or email us here at UMA. Also, send us an email letting us know that you have made a confirmed submission. We have received dozens and love to hear the good news.
|
Dear UMA Members,
The day so many of you have waited for has finally arrived.
Tonight the US Department of Treasury has opened the CERTS Portal. The link is on the page where they previously published program guidelines, an FAQ, and information about ID.me requirements. Please note the guidelines have been revised since they were first published.
The deadline to apply is July 19.
UMA will provide a briefing for Members this coming week.
|
|
1. Help for operators: Troubleshooting ID.me's registration process
by Ken Presley
|
June 2, 2021 - Treasury is requiring each company that intends to complete a submission under the CERTS Act to register for credentials using the online service ID.me, and many operators have reported difficulties with the process.
A UMA survey last week revealed about one-half of registrants have experienced some difficulties. We have discussed some of the challenges you are experiencing with representatives of Treasury and they assure us they are working to make the experience as seamless as possible.
If you review the May 6, Guidelines for the Coronavirus Economic Relief for Transportation Services (CERTS) Grant Program, please note on page 9, prospective registrants are directed to:
This is considerably more direct than going through the ID.me webpage and should solve many if not most registration difficulties.
Eventually, everyone seems to be obtaining credentials. Hopefully, the portal opens this week for submissions. Stay tuned!
|
Sign up for CERTS email updates from Treasury
|
CERTS recap and updates: Treasury expects portal open by end of May
by Ken Presley
After participating in a couple of conference calls with U.S Treasury, some updates and review are warranted.
Apparently, Treasury staff appear to be making timely progress, so barring any unforeseen circumstances they anticipate having the portal open and ready to receive (not yet released) completed applications by the end of May.
Later this week, Treasury will post a link where operators can request email updates and announcements. Click here to link to the Treasury “CERTS” page.
As previously mentioned in last week’s UMA Town Hall, the application period will be four weeks long. Applicants will be able to check the status of their submitted application by logging into the portal, which will display various codes indicating the progress of the application in the review process. Treasury is advising that their officials will not respond to emails or calls from applicants or any third parties seeking information on Treasury’s deliberation over an application.
Treasury staff advises they have anticipated the deluge of submissions and concluded their system should handle the initial rush. They do not anticipate delays due to a crashed website.
Successful applicants will be notified by email as soon as they are determined to be eligible for a grant. However, Treasury will not advise the amount of any grant until after the four-week application period closes. To ensure the funds allocation to industries is evidence-based and equitable, Treasury will perform the allocation to industries after the grant application period closes so that actual data from the known pool of all eligible applicants across industries is the basis for the allocation.
What is a non-competitive grant?
As previously mentioned in UMA correspondence and Town Halls, CERTS grants are formula grants and are non-competitive. Typically, “competitive” grants require a narrative as applicants compete for funds based on their need, how they will apply funds if awarded, and how their award will meet the goals set out by Congress. Generally, in a formula grant, all eligible companies that submit a complete application are approved. Treasury assures that all eligible applicants will be offered a grant that is a share of the $2 billion appropriated for the CERTS program.
Treasury will publish the formula and other considerations for calculating individual grant awards as soon as possible after the application deadline. An applicant’s lost revenues from 2019 to 2020 will be the primary factor in the grant-sizing formula used to determine the grant amount offered to an individual approved applicant.
To ensure access by small businesses in accordance with the CERTS Act, the formula may include a minimum grant size to ensure all approved applicants receive a basic amount and/or a maximum grant size to provide for a deeper distribution of available funds to all approved applicants.
Treasury staff intends to release a “Frequently Asked Questions” (FAQ) to be posted on the CERTS/Treasury website.
Eligible Use of Funds
Subject to other rules and conditions in the CERTS statute and grant agreement, grantees may use grant funds for operating expenses, including but not limited to:
- Payment of payroll costs (see the definition of “payroll costs” above) and compensation of returning employees for lost pay and benefits during the COVID-19 pandemic.
- The acquisition of services, personal protective equipment, and other measures needed to protect workers and customers from COVID–19 operations.
- Maintenance of existing capital equipment and facilities, such as rent, leases, insurance, and interest on regularly scheduled debt service (Example: funds may be applied to coach payments interest only – not principal).
Ineligible Use of Funds
- Grantees may not use grant funds for:
- Any payment or prepayment of principal on a debt obligation, except for any principal on a debt obligation incurred during the COVID-19 pandemic for the purpose of maintaining the payment of payroll costs during the COVID-19 pandemic.
- Capital expenditures. (Example: funds used by a company to acquire, upgrade, and maintain physical assets such as property, plants, buildings, technology, or equipment.)
- Delinquent taxes.
- Any compensation of an individual employee in excess of an annualized salary rate of
- $100,000, i.e., any compensation in excess of $8,333 per month, $3,846 per bi-weekly period, $1,923 per week, etc.
- Any tax imposed or withheld under chapters 21 (Federal Insurance Contributions Act), 22 (Railroad Retirement Act Tax), or 24 (Collection of Income Tax at Source on Wages) of the Internal Revenue Code of 1986.
- Any compensation of an employee whose principal place of residence is outside the United States.
- Any qualified sick leave wages for which a credit is allowed under section 7001 of the Families First Coronavirus Response Act (26 U.S.C. § 3111 note, Public Law 116–127)
- Any qualified family leave wages for which a credit is allowed under section 7003 of that Act (26 U.S.C. § 3111 note, Public Law 116–127).
- Any bonus, raise in excess of inflation, or other form of additional employee compensation.
- Any expense for which funding or financing has been awarded, sub-awarded, or otherwise provided through another Federal program.
Notifications and Amount of Grants
Eligible applicants will be notified of the grant amount for which they are eligible and will be sent a set of documents to execute. Applicants will be required to certify under penalty of perjury that (1) the information and certifications provided in the application and its attachments are true and correct, and (2) the applicant has documentation to support amounts and figures entered into the application form. Anyone who knowingly submits a false claim or makes a false statement is subject to criminal and/or civil penalties, including confinement for up to 5 years, fines, and civil penalties. Upon receipt of completed documents, Treasury will deposit funds electronically.
Finally, Federal grants are considered taxable income and will need to be reported as such. Check with your state revenue office to determine you obligation to your state(s). As always, UMA consistently recommends the inclusion of your accountant and/or CPA regarding the CERTS grant.
In summary, the guidelines provide the majority of the requirements you will need to submit as well as conditions. You still have time to coordinate with your accountant and make sure you are prepared.
Successful applicants will be notified by email as soon as they are determined to be eligible for a grant. However, Treasury will not advise the amount of any grant until after the four-week application period closes. To ensure the funds allocation to industries is evidence-based and equitable, Treasury will perform the allocation to industries after the grant application period closes so that actual data from the known pool of all eligible applicants across industries is the basis for the allocation.
What is a non-competitive grant?
As previously mentioned in UMA correspondence and Town Halls, CERTS grants are formula grants and are non-competitive. Typically, “competitive” grants require a narrative as applicants compete for funds based on their need, how they will apply funds if awarded, and how their award will meet the goals set out by Congress. Generally, in a formula grant, all eligible companies that submit a complete application are approved. Treasury assures that all eligible applicants will be offered a grant that is a share of the $2 billion appropriated for the CERTS program.
Treasury will publish the formula and other considerations for calculating individual grant awards as soon as possible after the application deadline. An applicant’s lost revenues from 2019 to 2020 will be the primary factor in the grant-sizing formula used to determine the grant amount offered to an individual approved applicant.
To ensure access by small businesses in accordance with the CERTS Act, the formula may include a minimum grant size to ensure all approved applicants receive a basic amount and/or a maximum grant size to provide for a deeper distribution of available funds to all approved applicants.
Treasury staff intend to release a “Frequently Asked Questions” (FAQ) to be posted on the CERTS/Treasury website.
Eligible Use of Funds
Subject to other rules and conditions in the CERTS statute and grant agreement, grantees may use grant funds for operating expenses, including but not limited to:
· Payment of payroll costs (see the definition of “payroll costs” above) and compensation of returning employees for lost pay and benefits during the COVID-19 pandemic.
· The acquisition of services, personal protective equipment, and other measures needed to protect workers and customers from COVID–19 operations.
· Maintenance of existing capital equipment and facilities, such as rent, leases, insurance, and interest on regularly scheduled debt service (Example: funds may be applied to coach payments interest only – not principal).
Ineligible Use of Funds
Grantees may not use grant funds for:
· Any payment or prepayment of principal on a debt obligation, except for any principal on a debt obligation incurred during the COVID-19 pandemic for the purpose of maintaining the payment of payroll costs during the COVID-19 pandemic.
· Capital expenditures. (Example: funds used by a company to acquire, upgrade, and maintain physical assets such as property, plants, buildings, technology, or equipment.)
· Delinquent taxes.
· Any compensation of an individual employee in excess of an annualized salary rate of
· $100,000, i.e., any compensation in excess of $8,333 per month, $3,846 per bi-weekly period, $1,923 per week, etc.
· Any tax imposed or withheld under chapters 21 (Federal Insurance Contributions Act), 22 (Railroad Retirement Act Tax), or 24 (Collection of Income Tax at Source on Wages) of the Internal Revenue Code of 1986.
· Any compensation of an employee whose principal place of residence is outside the United States.
· Any qualified sick leave wages for which a credit is allowed under section 7001 of the Families First Coronavirus Response Act (26 U.S.C. § 3111 note, Public Law 116–127)
· Any qualified family leave wages for which a credit is allowed under section 7003 of that Act (26 U.S.C. § 3111 note, Public Law 116–127).
· Any bonus, raise in excess of inflation, or other form of additional employee compensation.
· Any expense for which funding or financing has been awarded, sub-awarded, or otherwise provided through another Federal program.
Notifications and Amount of Grants
Eligible applicants will be notified of the grant amount for which they are eligible and will be sent a set of documents to execute. Applicants will be required to certify under penalty of perjury that (1) the information and certifications provided in the application and its attachments are true and correct, and (2) the applicant has documentation to support amounts and figures entered into the application form. Anyone who knowingly submits a false claim or makes a false statement is subject to criminal and/or civil penalties, including confinement for up to 5 years, fines, and civil penalties. Upon receipt of completed documents, Treasury will deposit funds electronically.
Finally, Federal grants are considered taxable income and will need to be reported as such. Check with your state revenue office to determine you obligation to your state(s). As always, UMA consistently recommends the inclusion of your accountant and/or CPA regarding the CERTS grant.
In summary, the guidelines provide the majority of the requirements you will need to submit as well as conditions. You still have time to coordinate with your accountant and make sure you are prepared.
Get ready for the CERTS grant process now
May 17, 2021 - The Department of Treasury is not yet taking applications, but operators can ensure that they are ready to begin the process whenever that day comes by gathering pertinent information and taking some simple steps.
Gather the following:
- Income statements (2019 and 2020)
- Payroll information (2019 and 2020)
- Total of ANY prior aid (PPP, EIDL, Main Street Lending Program, grants, etc.)
Take the following actions
In preparing for CERTS funding, remember to review 'Conditions of Receipt' for federal funds
In the guidelines for CERTS, near the end there is some very good advice: “Prospective grantees should review section 421(c)(6), “Conditions of Receipt” and section 421(c)(8), “Additional Conditions of Certain Receipts” for more details on the statutory conditions on the receipt of CERTS grant funds.
As operating companies that received “ADA Accessible” and “Security” grants in the past will tell you, acceptance of a Federal grant comes with some very large responsibilities and anyone thinking they may fall through the cracks is likely very mistaken. Funds must be spent precisely in the manner dictated and complete reports often referred to as “Certifications & Assurances”. Federal audits are routine.
1. Companies seeing light at the end of the tunnel for CERTS grants
|
“Hearing this guidance has finally been released is music to the ears of motorcoach operators who fought long and hard for this critical funding,” UMA President and CEO Larry Killingsworth said. “We can see the light at the end of the tunnel when companies will be able to apply for grants and finally receive some much-needed government aid, more than a year into this pandemic.”
|
|
|
|
2. Learn what 'ID.me' is and the role it will play in CERTS grant application process
|
|
|
From the CERTS Guidance:
Application Credentials. To gain access to the application portal and submit an application, a company representative must be registered with a username and password through the ID.me identity service. ID.me is an approved service provider for Treasury, the Social Security Administration, the U.S. Department of Veterans Affairs, and other Federal agencies. ID.me offers a one-time identity verification process to safeguard company data and authenticate users prior to accessing Treasury systems.
Motorcoach operators poring over the recently-released guidance for the Coronavirus Economic Relief for Transportation Services (CERTS) Act might be wondering about the identity verification service known as, ID.me. For the purpose of this grant program, the Department of Treasury will require an applicant to register with ID.me. UMA's Ken Presley urges those who intend to apply for CERTS grants to create an ID.me account as soon as possible because it is one thing operators can do right now to prepare for when applications and the portal are available.
|
|
|
|
|
|
|
|
| |
December 28, 2020
The CERTS Act is law
|
by Ken Presley
Dec. 28, 2020 | Washington, DC President Trump signed the bill containing the CERTS Act last night bringing to rest uncertainty over a threatened veto.
The President had threatened to veto the legislation despite his staff having been part of the negotiations, and assurances he would sign the omnibus bill. After passage in the House and Senate, President Trump insisted on inclusion of $2,000 per person stimulus instead of the $600 contained in the bill.
Already working on the CERTS portion of the bill, the President’s signature triggers an actual proposed rule regarding the requirements and application process.
The bill also includes $284 billion in funding for the Paycheck Protection Program (PPP), providing a critical second forgivable loan to businesses with a sizable reduction in gross sales (25% or more).
By signing the bill, the President also averted a potential government shutdown.
|
|
|
Resources you need: Review Dec. 23 special Town Hall slides and recordings to prepare to get funding
|
|
Download the slides and watch the recording for full information. The next UMA Town Hall will take place Thursday, January 7 at 2 p.m. ET.
|
|
Paycheck Protection Program Loan Forgiveness Tool
You can find the new PPP forgiveness resource at PPPForgivenessTool.com. Any business that took out a PPP loan can use the tool free, regardless of whether they worked with a bank or a non-bank lender.