Updated: January 28, 2021
Additional Paycheck Protection Program (PPP) loan opportunities were included in the Economic Aid Act, additional COVID Relief passed in late December. Nonprofits, including both 501(c)(3) and 501(c)(6) organizations, are eligible for first draw PPP loans. 501(c)(3) nonprofits that already received a PPP loan may be eligible for a “second draw” if they can show that they experienced reduced revenue in 2020 in comparison to 2019 (for the entire year or for any one quarter).
Latest PPP Resources:
- For organizations that have not yet received loan forgiveness for their first PPP loan, join us on Jan 21 for a free webinar on PPP Forgiveness.
- 501 Commons is offering technical assistance and can connect you to a lender if your bank is not able to help. Learn more here.
- PPP First Draw (Form 2483)
- PPP Second Draw (Form 2483 SD)
The Small Business Administration released additional PPP guidance interpreting provisions of the new COVID Relief Law:
- Interim Final Rule on Paycheck Protection Program as Amended by Economic Aid Act (Released 1/6/2021)
- Interim Final Rule on Second Draw Loans (Released 1/6/2021)
- SBA Guidance on Accessing Capital for Minority, Underserved, Veteran and Women-Owned Business Concerns (Released 1/6/2021)
The following analysis is provided in part by our partner, the National Council of Nonprofits. We will continue to update this page. If you have any questions or comments, please contact us!
Congressional and Administration negotiators reached an agreement on the latest round of COVID-19 relief this past weekend and passed it Monday night. The legislation is key to supporting nonprofits and our communities across the country.
The bill spans 5,593 pages and allocates more than $2.3 trillion.
In addition to keeping the federal government open through the end of September, the legislation includes many major protections and relief provisions. The bill provides expanded unemployment benefit of $300 per week for an additional 11 weeks; provides $600 relief checks per adult and child in households earning up to $150,000 a year; designates more than $330 billion for small business aid, as well as large sums for schools, hospitals and vaccine distribution. There’s also funds for childcare, nutrition, rental assistance, a one-month extension of the Center for Disease Control (CDC) eviction moratorium; and a continuation of student loan forbearance.
Key Nonprofit Policy Issues
- Coronavirus Relief Fund (CRF): Extends the deadline for states to spend CRF funds to 12/31/2021.
- Relief for Reimbursing Employers: Extends until 3/14/2021 the 50% federal coverage of the costs of self-insured “reimbursable” employers.
- Charitable Giving Incentives: Reestablishes the $300 above-the-line deduction for 2021 and applies a $600 deduction for couples filing jointly in 2021. Imposes a penalty for overstating contributions. The bill also extends for one year the increased limits on deductible charitable contributions for individuals who itemize and for corporations.
- Paycheck Protection Plan (PPP) Reforms
- Forgiveness: Expands forgivable expenses to include the costs of Personal Protective Equipment (PPE), workplace modifications. Provides short-form approval of loans of $150,000 or less.
- Second Draw Loans: Charitable nonprofits may qualify for an additional PPP loan (Second Draw) of up to $2 million if they a) employ 300 or fewer employees and b) experience a decline in gross receipts of 25% in one of the four quarters in 2020 compared to the same quarter in 2019. NOTE: Nonprofit “gross receipt” is defined using tax-law definition and not the arbitrary definition seen in earlier drafts.
- Provides $284 billion for first and second forgivable PPP Loans
- Includes a specific set-aside for Community Development Financial Institutions (CDFI) & Minority Depository Institutions
- Provides $9 billion emergency Treasury investment for lending in low-income and underserved communities
- Provides $3 billion emergency support in CDFI fund
- Employers can deduct expenses associated with their forgiven PPP loans
- Economic Injury Disaster Loan (EIDL) Grants: Provides $20 billion for additional $10,000 grants; repeals deduction of EIDL grants from amount of loan forgiveness.
- Save Our Stages: $15 billion dedicated to aid performance venues, independent movie theaters, and cultural institutions.
- Employee Retention Tax Credit (ERTC): Extends for six months (to 7/1/2021) and expands usefulness, particularly to nonprofits excluded from PPP participation, by reducing required decline in gross receipts from 50% to 20%, increasing the refundable payroll tax credit from 50% to 70%, and covering up to two quarters for a total benefit of $14,000 per covered employee. It also provides that employers who receive PPP loans may still qualify for the ERTC with respect to wages that are not paid for with forgiven PPP proceeds.
- Paid Sick Leave Tax Credit: Extends through 3/31/2021 the refundable payroll tax credits for paid sick and family leave that were established in the Families First Coronavirus Response Act. The bill also extends through 2025 the 12.5% to 25% income tax credit for paid family and medical leave originally enacted in the 2017 tax law.
Additional Provisions in COVID Relief
- $25 billion in rental assistance.
- $800 million designated for Native American housing entities.
- Federal eviction ban extended through the end of January 2021.
- $13 billion in SNAP and child nutrition benefits.
- $82 billion in funding for colleges and schools.
- $54 billion for public K-12 schools.
- $23 billion for a higher education fund.
- $10 billion for child care.
- Grants are aimed at childcare providers currently open or temporarily closed due to COVID-19.
- Grants can be used for personnel costs; sanitization and cleaning; PPE; fixed costs, including mortgage obligations, rent, utilities and insurance; and modifications to childcare services as a result of the COVID-19 pandemic.
- $7 billion for State Broadband Deployment and Broadband Connectivity grants.
- Includes Emergency Broadband Benefit.
- $300 million for rural broadband.
- $3 billion for an Emergency Educational Connectivity Fund.
- $200 million to Institute of Museum and Library Services (IMLS) to purchase and distribute Internet-connected devices to libraries in low-income and rural areas
- $475 million to FCC COVID-19 Telehealth Program to support efforts of healthcare providers to address coronavirus, including a 20% set aside for small, rural health providers.
- Chart summarizing Nonprofit Provisions in COVID Relief Legislation, National Council of Nonprofits, Dec. 21, 2020.
- National Council of Nonprofits Statement on COVID Relief Package, news release, Dec. 21, 2020.
- What’s in the COVID Relief Bill for Nonprofits (video), Town Hall, National Council of Nonprofits, Jan. 13, 2021.
- PPP Loan Forgiveness Guidance, 501 Commons, including free support for loan applications and loan forgiveness.
- SBA’s overview of the Shuttered Venue Operator Grant.
- Didn’t Get Requested PPP Loan Forgiveness? You Can Claim the Employee Retention Credit for 2020 on the 4th Quarter Form 941, IRS, Jan. 22, 2021.
- “Plain English” explanation of the IRS Notice: IRS Guidance on Employers with PPP Loans Claiming ERC Under Special Fourth Quarter 941 Rule Limited to Those Denied Forgiveness, Ed Zollars, Kaplan Financial Education, Jan. 24, 2021.
We will continue to update this page. If you have any questions or comments, please contact us!