The Ring is proud to present “The Boxing Esq. Podcast with Kurt Emhoff”. Emhoff, an attorney based in New York City, is a top boxing manager who has represented over 10 world champions in his 20-plus years in the sport.
On this special episode, Emhoff is joined by Fistianados host Evan Rutkowski to go over the recent Coronavirus stimulus legislation, the CARES Act, set up to provide relief to those forced out of work by the COVID-19 pandemic.
They are joined by two distinguished guests, labor attorney Walter Kane and accountant/financial planner Mike Alvini. Walter and Mike break down how and when to apply for unemployment benefits, the Paycheck Protection Program Loan (AKA 7a loan), the COVID Disaster Relief Loan (AKA the 7B loan), as well as the qualifications for the $1,200 stimulus checks.
The main takeaway is apply, apply, apply. If you are in the boxing industry and out of work, definitely give this podcast a good listen and contact your accountant or financial advisor to help you. If you don’t have one – Walter and Mike leave their contact information at the end of the podcast (also provided at the end of this article).
Some helpful links:
How to apply for a 7b loan: https://www.sba.gov/
How boxers can apply for unemployment by state: https://www.careeronestop.org/LocalHelp/UnemploymentBenefits/Find-Unemployment-Benefits.aspx
Below are a few excerpts from the interview:
On independent contractors (e.g., boxers) eligibility for unemployment benefits under state law and the CARES Act and how to apply and what to expect:
Walter Kane: “Boxers are independent contractors, so therefore they’re eligible. Traditionally, unemployment hasn’t included independent contractors. Because of the pandemic and because of the gig economy there’re just so many independent contractor employees out there that the government has decided that they need to be dealt with. They want them to stay home. They want people to not be in the street and that includes people in the gig economy. The people who are independent contractors, actors, Uber drivers, and boxers fall into that category.
Unemployment is a state-run issue with the federal government. Each state has its own rules. So my advice would be to go to your state’s website. Usually your state.gov will get you there. Then just go fill out the application for unemployment benefits. So, the levels of benefits are different (between states). The applications may be a little bit different, but. they should be somewhat coordinated. They’re trying to although I think they’re having a tough time because the numbers are so dramatic. 15 million people applying for unemployment insurance, but generally you have to go to your state (either by website or phone) and apply that way.
(The amount of unemployment benefits in) New York and New Jersey, for example, are different both how you calculate it and the maximum amount. So New York’s maximum is $504, and New Jersey’s is a couple hundred dollars more. So, the thing that is universal is that the Pandemic Unemployment (Compensation) that the federal government is kicking in at this point is $600 a week across the board. So, you tack that on top of whatever your state allocation would be. And like I said, it’s run by both the federal government and the States, they participate in unemployment. But each state is allowed to have their own maximums, minimums and how they calculate it. Is it half? Is it some percentage of what you earn? The other piece that’s kind of ubiquitous across the federal government has said you’re going to get that $600 until the end of July. So, unemployment has been extended in New York and I think most states from 26 weeks to 39 weeks. And that’s also part of this legislation.”
On benefit options for LLCs whose income relies on boxing – whether to apply for unemployment or the Payroll Protection Program:
Michael Alvini: “So the real question is whether or not you want to apply for unemployment or the Payroll Protection Program (PPP), which was rolled out under the CARES Act. To get into the Payroll Protection Program a little bit, that is basically a loan funded by the Small Business Administration through your banker.
And it’s calculated based on income and/or payroll. Where if you use those funds to pay yourself and/or other workers that you hire – also, in addition, rent, mortgage payments, utilities – if you use the funds on items like that, you actually don’t have to pay the loan back. So a portion or all of that loan could be forgiven. And what ends up happening is you have a choice between getting unemployment or, and we’ll call it the PPP for now. You’ll have a choice between one of those two programs, but you can’t have both. I would say for a fighter, generally, unemployment would be the best unless they’re really in that top tier of earners. I’ll explain why.
With the Payroll Protection Program, each employee or independent contractor is capped at $100,000 as far as their salary is concerned. And when calculating the forgivable amount, it ends up being a percentage of that. So if you have someone that’s in the lower tier, for example, let’s say you have a fighter who cleared $50 grand last year. Their payroll protection amount would only be about $10,000. That’s roughly what they would qualify for in forgivable grants.
Now applying for unemployment, since the federal government’s adding $600 a week to whatever you qualify for through your state and I want to say it can last as long as 39 weeks. That number can often outweigh anything you could get through the grant program. So the decision is definitely based on how much income you have and how you’re structured. Now, if you’re a higher level earner and you have perhaps formed an LLC, made an S corporation election – I certainly have fighters who put their families on their payroll. So if you have a situation where you have a fighter, and the fighter’s wife and children are on the payroll, and you have the chance to take that 100,000 multiplied several times over, then the Payroll Protection Program becomes very attractive because you get the ability to have a rather large forgivable loan sent to you by the federal government. So you know, definitely a number crunch.”
On the qualifications for the $1,200 stimulus payment and whether it matters which tax return you use (2018 or 2019) to claim the benefit:
Michael Alvini: “It’s a one-time $1,200. If you’re married, it’s $2,400 and the check tacks on $500 per child under 17 that you claim on your tax return. The answer is yes, it does matter. For individuals, anyone making less than $75,000 a year will get the full amount. If you make under 99,000 you’ll get a reduced amount, but you’ll get something. In general, for every hundred bucks a year you earn over $75,000, your payment’s gonna drop by dollars until you hit $99,000 and it ends up being zero. If you’re married, you just double those amounts. So 100K up to 150K, you’ll receive the entire stimulus package and it phases out all the way up to $198,000.
Now based on which year you filed, it’s important to point this out, because I don’t think a lot of people know this. These checks are actually an advance of a credit you’ll be claiming on your 2020 tax return. So the which year you filed is more important for timing than anything else. So let’s say you had a great year in 2018 and you made more than the legal limit per se, and in 2019 you had a little bit less income. You’d want to file your 2019 ASAP so you could get some money into your hands faster. But ultimately 2020 probably isn’t going to look that good based on the way things are going. So you’re going to be entitled to that money, but you probably wouldn’t be able to get it until you file your 2020 taxes in 2021 if it’s going off of the 2018 return. So if you haven’t filed 2019 to summarize, they’re going to go based on your 2018 income. If you file 2019 it’s going to be based on that. Ultimately, the credit is going to be claimed on your 2020 tax return and this is an advance of that.”
On some general advice for people in the boxing industry:
Michael Alvini: “I have to agree with Walter – apply, apply, apply! I think being aggressive and trying to get involved in the programs is very important. I’m certainly open to helping if anybody wants help. I work with plenty of fighters that we don’t charge fees to. I’m a huge boxing fan. It’s something I’ve been involved in for a long time. The application process is not that difficult for someone who’s used to looking at these things. So if people do need help, we’re willing to provide it.”
Walter Kane: “I would say the same for myself. You can get to my law firm. If you want to ask a question, we have a website. You could contact us. I’m happy to provide advice to people. But like Michael just said, apply, don’t shy away from it. And again, if there’s a question on the form that you don’t know the answer to, put it out there to other people cause they’re probably struggling with the same issues. Ask on your Twitter page with other fighters and say, “Hey, what do you know about this question? Did you talk to anybody? How did you answer it?”
The post The Boxing Esq. Podcast, Ep. 47: The CARES Act edition appeared first on The Ring.