FAQ: What ASCAP Members Affected by the Coronavirus Crisis Should Know About Economic Stimulus & Relief Programs
April 1, 2020
In an effort to help you quickly understand how the US government response to the coronavirus pandemic may impact you as a music creator and a business owner, we have prepared the following FAQ. These questions and answers will be updated as the situation develops and more information about government assistance is available.
Importantly, this is only a high-level summary of what has transpired so far and is not intended to provide individual or corporate tax advice. Please seek advice from your accountant or tax professional to ascertain how these packages and programs apply to you.
Q: What is ASCAP doing to make sure music creators receive the help they need in this crisis?
A: In addition to providing a number of online tools and resources for our members, ASCAP has been on the front lines of the fight to make sure music creators get the help they need from Washington. ASCAP teamed up with music organizations including BMI, SESAC SONA, NMPA, NSAI, SGA and NSAI to send a joint letter to Congress, urging legislators to include relief for music creators in any economic stimulus packages and pandemic assistance legislation. And ASCAP also joined a broader entertainment industry letter calling for a relief package that addresses the unique needs of creative professionals. The final $2.2 trillion emergency relief package signed into law on March 27 contains much of the financial assistance and relief that we requested for our members, including some notable provisions to help music creators who are self-employed, independent contractors and those who own or work for small businesses.
ASCAP has also partnered with other music industry leaders to launch MusicCovidRelief.com, an online resource center to help music professionals access information and applications to receive benefits made available by the CARES Act.
Q: What is the government doing to protect and aid individuals and small businesses in response to the coronavirus pandemic?
A: Local, state and federal governments are working to provide economic assistance for everyone impacted by this crisis. At the federal level, Congress has already passed, and the president has signed, three legislative packages, colloquially referred to as Phase 1, Phase 2 and Phase 3, to address the crisis. Phase 1 (The Coronavirus Preparedness and Response Supplemental Appropriation Act) was enacted on March 6 and provided an $8.3 billion appropriation for federal and state agencies that are on the front lines in fighting the pandemic. Phase 2 (the Families First Coronavirus Response Act), enacted into law March 18, was aimed at further bolstering the federal government’s response to the pandemic and addressing the severe impacts of the coronavirus on Americans’ personal safety and financial security. On March 27, the president signed Phase 3 (the CARES Act), which provides $2.2 trillion in aid to individuals and businesses. Phase 4, which Congress is likely to take up in April or May, will likely include provisions designed specifically to stimulate the economy.
On a daily basis, many states and localities are enacting emergency measures relating to employment, tax and mortgage relief, access to health care and a wide variety of other assistance programs. In addition to visiting MusicCovidRelief.com, the link to the resource center in response to the last question below will help you get a sense of available resources in your area. We also encourage you to visit the website of your governor and mayor for additional information.
Q: What is included in the CARES Act "Phase 3" federal aid package recently signed into law?
A: Fortunately, the final $2.2 trillion emergency relief bill signed into law on March 27 contains much of the financial assistance and relief that ASCAP and other songwriter organizations requested for our members, including some notable provisions to help music creators who are self-employed, independent contractors and those who own or work for small businesses.
Q: What does the new federal relief package mean for me as an individual?
A: Three big things: 1) the potential for a one-time, direct cash payment; 2) expanded unemployment insurance coverage; and 3) new small business loan opportunities for certain self-employed individuals. You should consult your accountant or tax professional to understand exactly how these provisions may apply to you.
- Individual cash payments: The package provides one-time, direct cash payments of up to $1,200 to every adult American citizen who files an individual tax return; up to $2,400 to every married couple that files jointly; and up to $500 for each child of the taxpayer. Individuals who reported less than $75,000 of taxable income, and married couples who reported less than $150,000, on their 2019 tax return (or 2018, if 2019 has not yet been filed) would receive the full amounts. The amounts are phased out for tax filers above those levels, with amounts reaching $0 for individual filers reporting $99,000 in taxable income and joint filers reporting $198,000. The Secretary of the Treasury is directed to disburse these payments “as rapidly as possible,” with the goal being within three weeks. If you received a tax refund by electronic deposit, the checks will be electronically deposited into your account. If not, it will be sent to the mailing address on your tax return.
- Expanded unemployment insurance: The package also includes an unemployment insurance (UI) program that may cover songwriters and composers who work as independent contractors (IC) or sole proprietorships (SP) and thus do not qualify for traditional UI programs. To be eligible for this program, an individual must self-certify to the existence of certain criteria, such as infection with coronavirus, need to take care of a child whose school has been shut down, cancellation or postponement of future work, or closure of workplace, that prove s/he was unable to work as a direct result of the coronavirus public health emergency. An individual who continues to qualify will receive $600/week until 12/31/2020. You must apply with your state unemployment office, which will guide you through the process.
- Paycheck Protection Program: Additionally, the package enables ICs and SPs to qualify for very low interest Small Business Administration (SBA) loans up to $10 million. The principal and interest on these loans will be forgiven to the extent they are used to cover up to eight weeks of overhead expenses, including payroll for individuals earning under $100,000 per year, mortgage, rent and utilities. You will be able to apply for these loans directly from your local bank, which will be authorized to make same-day disbursements to eligible recipients.
UPDATE - 4/24/20: On April 24, the federal government made an additional $320 billion in Paycheck Protection Program loans available for small business owners. Visit MusicCovidRelief.com for step-by-step guidance on how eligible businesses can apply.
- The legislation also enables ICs and SPs to seek SBA economic injury disaster loans (EIDL), which include a grant up to $10,000 to be distributed within three days of applying for the loan. The $10,000 EIDL grant does not need to be repaid, even if the grantee is subsequently denied an EIDL, and may be used to provide paid sick leave to employees, maintain payroll, meet increased production costs due to supply chain disruptions, or pay business obligations, including debts, rent and mortgage payments. Eligible grant recipients must have been in operation on January 31, 2020.
Q: What does the new federal aid package mean for me as a small business owner or music publisher?
A: The Phase 3 package includes a wide variety of loan programs for small businesses that may help certain ASCAP publisher members with 500 or fewer employees. It also includes a number of business tax law changes that will benefit ASCAP publisher members, large and small. These provisions will help small businesses maintain payroll, meet certain overhead expenses and provide immediate access to capital to help them weather the crisis and quickly recover. Visit the US Small Business Administration's coronavirus resource center for more guidance and loan resources.
Q: Are there any changes to copyright registrations or procedures?
Effective April 8, the Copyright Office is allowing for electronic submissions of a number of documents that previously needed to be in paper form; the Office is also updating several of the regulations to remove the requirement that submissions to the Office contain a handwritten signature. Copyright owners now have additional time to register a work in order to be eligible for certain remedies in infringement actions. While statutory damages and attorney’s fees are generally available only if a work is registered before the infringement or within three months after first publication, the Copyright Office has now extended the three-month window for applicants who can show that they were unable to comply due to the emergency—for example, because they could not mail physical materials or lacked access to a computer. To qualify, an applicant must submit a statement certifying under penalty of perjury that they would have met the deadline but for the national emergency. The adjustment provides similar accommodations for persons who are prevented from serving or recording notices of termination within statutorily required time periods. These persons likewise must provide a certification that they would have met the deadline but for the national emergency.
UPDATE - 11/9/20: On September 2, the Copyright Office extended the temporary adjustments to certain timing provisions under the Copyright Act for persons affected by the COVID-19 national emergency. These emergency modifications were set to continue through November 9, 2020. Because the disruptions remain in effect, however, the Register is extending the modifications through January 8, 2021.
More information is available at copyright.gov/coronavirus.
Q: Will I still get royalty distributions from ASCAP?
A: Even while ASCAP offices are closed, ASCAP is still very much up and running and working for you. Our domestic publisher royalty distributions went out on March 20th, and we are working hard to get our domestic writer distributions out in April. Please understand that our U.S. licensee customers and foreign partners have experienced immediate and material challenges in their businesses. As a result, revenue to ASCAP will decrease during this time and, therefore, your royalty distributions will decrease as well. While we cannot put a figure on this right now, we will keep you updated as events unfold. For more info on how to keep your ASCAP royalties flowing, CLICK HERE. And you can always reach out to our Global Member Services team for support, should you have any questions or concerns about your statements.
Q: How can I help other music creators in need or apply for assistance myself?
ASCAP’s Music Unites Us page has a number of useful links to organizations offering financial assistance. We have also partnered with other music industry leaders to launch MusicCovidRelief.com, an online resource center to help music professionals access information and applications to receive benefits made available by the CARES Act.
Q: How can songwriters and other music creators apply for government relief programs?
The following link leads to a resource center which lists a broad variety of programs that songwriters can apply to federally, as well as in California, New York State, New York City and selected other jurisdictions. This resource center will be updated with new links as they come online. Information about additional industry resources and relief programs can be found at MusicCovidRelief.com.
Statement from ASCAP President and Chairman Paul Williams on passage of the CARES Act (3/27/20):
“We are reminded in difficult times like these how music unites us, and we are thankful that all sides have joined in solidarity to help everyone affected by this crisis, particularly our community of songwriters and composers who bring so much joy to the world. ASCAP will continue to do everything in our power to ensure that American music creators can weather this storm and continue sharing their incredible talents with the world."
Statement from ASCAP Chief Executive Officer Elizabeth Matthews on passage of the CARES Act (3/27/20):
“We are grateful that support is coming for millions of American songwriters and music creators whose lives and livelihoods have been upended by this crisis. In particular, music creators who are self-employed and those who own or work for small businesses will now receive emergency assistance, thanks to the music community rallying together to draw attention to their needs. As the entire music industry faces an uncertain future, ASCAP stands ready to do our part to help music creators endure these difficult times.”