For photographers all over the world, 2020’s wedding and portrait season epitomized expectations not meeting reality. Between COVID-19, major elections, and all sorts of social and political events, the photography season just did not go as planned. Thankfully, there are a few government relief programs, tax incentives and other strategies you can take advantage of to help shore up the tidal wave of losses you, or someone close to you, probably experienced—or more likely are continuing to experience.
Government Funding: Paycheck Protection Program
The federal government has opened up a second round of their Paycheck Protection Program (PPP) funding that’s available to small businesses, including “sole proprietors,” which is the tax structure in which a lot of wedding photographers find themselves. There are a lot of resources out there that lay out the specifics of PPP qualification, but the overall highlights are as follows:
If it’s your first PPP loan, you qualify if:
1. you were operational before February 15, 2020, and are still operational at the time of application
2. you are small (less than 500 employees)
3. the current economic uncertainty (ahem, cancelled weddings) makes a PPP loan necessary to maintain your business.
If it’s your second PPP loan, most of the above applies except that you must be able to show that you had a 25 percent reduction in gross revenue. “Gross” is revenue before expenses, by the way.
The great thing about these loans is the ability to (relatively easily) get them forgiven. There is a handful of criteria that must be satisfied to successfully get them forgiven, but the rules are written in favor of small businesses—especially in an industry like ours that was hit so hard by the pandemic.
Applications are open now, and you apply through your bank. One of my favorite resources to sort out all this chaotic tax policy is Bench Accounting’s blog.
Government Funding: Economic Injury Disaster Loan
Another government funding option is the Economic Injury Disaster Loan (EIDL). Unlike the PPP, this is more of a conventional loan with no provision for forgiveness. The upside, however, is that the amount you can apply for and receive is much greater than the PPP. The loan terms are very generous too, compared to other options, with very low interest rates and really long repayment lengths.
Government Funding: Expanded Unemployment Insurance
Rules vary by state but for some states, including my home state of California, you don’t have to be a paycheck-receiving photographer to receive unemployment insurance (UI). You can apply for UI as an independent contractor, or “gig” worker, too. In addition to the state benefits, the federal government is kicking in an additional $300 per week.
Keep in mind that benefits received are taxable, so either opt to have taxes withheld from the get-go, or just somehow remember that a portion of the benefits will need to be paid in the form of taxes next April.
Find out how to apply from the U.S. Department of Labor.
Government Funding: Employee Retention Credits
If you have employees, the Employee Retention Credit is being extended by six more months, to June 2021, and has been increased in amount from 50 percent to 70 percent of an employee’s wages.
There are, of course, a handful of details to explore, but just know it’s there for starters. Here’s a guide from the IRS on claiming the credits.
President Biden’s American Rescue Plan
More than any other year, the availability of government programs is changing rapidly. The second round of PPP funding wasn’t even a thing until the last days of 2020, and then all of a sudden it passed and went into action. The White House has already proposed a new spending bill that’s going to expand all sorts of opportunities for small businesses to seek assistance to help stem financial losses associated with COVID-19, known as the American Rescue Plan (ARP).
Nothing is final until it’s final, so the main takeaway is: stay informed.
Anecdotally, I have heard so many fellow photographers were not aware that the first round of PPP funding, the EIDL or even unemployment benefits were available to them until funds backing these initiatives were essentially all dried up or expired. I think hearing chatter around the virtual water cooler from fellow photographers woke many of us up, and, I’m thankful to see many more friends tuned into this second round of stimulus payments. That being said, a lot of this money is free or cheap, and it’s important to stay up-to-date and informed during this season.
Brandon Scott is a wedding photographer and CPA based in Monterey, California.