At the end of March, the Coronavirus Aid, Relief, and Economic Security (CARES) Act was passed. This bill allocated $350 billion to help small businesses and nonprofits retain workers during the market downturn caused by the COVID-19 virus. These funds were allocated in less than two weeks. Since then, a new bill was passed this week with an additional $310 billion. Included in these bills are several benefits to help your church mitigate the financial impact caused by the pandemic.
SBA Loans
Nonprofits with fewer than 500 employees are eligible to apply for a loan from the funds allocated to the Small Business Administration (SBA). To be eligible for these loans you will need to prove you were in operation prior to February 15, 2020, and were paying salaries and payroll taxes for employees or paid independent contractors. You will also need to provide a good faith certificate that contains additional information.
Borrowers may also be eligible for loan forgiveness based on criteria related to the amount of the loan and the number of employees impacted.
Tax Credits
The bills also have a direct impact on tax credits for non-profits. Any non-profit that faced a shutdown order and lost 50% of revenue compared to 2019 may be eligible.
Note, churches cannot take advantage of both the SBA loans and tax credits.
Payroll Tax
Another form of relief in the bills allows churches to extend out payments of their share of the Social Security payroll tax owed through 2022.
The CARES Act was created to alleviate some of the financial burdens facing organizations. Assistance to help you sustain your organization during this pandemic has been made available again but as with the first round, these resources are limited and will go quickly. Please be sure to consult your tax advisor on any specifics as they relate to your organization.
Information contained in this blog was sourced from the U.S. Chamber of Commerce and The Curtis Group.
Read More:
ARE YOU CONTAGIOUS: SPREADING HOPE DURING THE COVID-19 PANDEMIC
