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Nonprofit Highlights from the CARES Act and the Families First Coronavirus Response Act

the businessman in the office is writing on the transparent boarThe CARES Act and the Families First Coronavirus Response Act provide significant benefits and protections for nonprofit organizations. Here’s an overview of the key aspects of each:

The Coronavirus Aid, Relief, and Economic Security (CARES) Act

On March 27th, President Trump signed into law the CARES Act, an emergency relief bill aimed at providing much-needed relief to individuals and businesses in response to the coronavirus. In addition, nonprofit organizations received vital support through the Act, and we have included an overview of some key provisions that are applicable to nonprofits below:

  • SBA 7(a) “Paycheck Protection” loan program – the definition of eligible businesses for the paycheck protection loan program includes nonprofit organizations, but only IRC Section 501(c)(3) organizations are included in this definition. Veteran organizations (as defined in IRC Section 501(c)(19)) and tribal businesses are also eligible, but all other non-profit organizations are ineligible to participate. Learn more about the SBA paycheck protection loan program here.
  • Emergency Economic Injury Disaster (EIDL) Grants – The CARES Act includes $10 billion for the federal SBA to provide emergency grants until Dec. 31, 2020. Any nonprofit entity exempt under IRC Section 501(c) is eligible for this loan program and can seek immediate relief through a $10,000 emergency advance within three days after applying for the EIDL grant. If the application is denied, the applicant is not required to repay the $10,000 advance. These organizations are excluded from participating in the Paycheck Protection Program.
  • Tax related provisions – Some of the tax-related provisions that may impact nonprofits include
    • Employee retention credits
    • Payroll tax deferral
    • Enhanced charitable contribution deductions for both individuals and businesses

We have an article that goes into more depth about these and other tax-related provisions of the CARES Act – View Article

  • Unemployment benefits – The CARES Act includes a specific section allowing nonprofit organizations to be reimbursed for half of the costs incurred through the end of 2020 to pay unemployment benefits, including self-funded unemployment benefits.

You can also read more about the key provisions of The CARES Act impacting nonprofit organizations through The National Council of Nonprofits – View Brochure

Families First Coronavirus Response Act

Signed into law on March 18th, this relief bill mandates paid leave benefits for small business employees affected by COVID-19 and establishes related payroll tax credits for employers.  The National Council of Nonprofits created an in-depth brochure on what the Families First Coronavirus Response Act means for Nonprofits – View Brochure.

We Are Here to Help

We understand that in this time of uncertainty you may have growing concerns for the financial health of yourselves and your organizations, employees and families.  We have curated some helpful resources on our COVID-19 Updates & Resources page and will continue to update it as new information becomes available. Please contact us if you have questions about these updates and how they may affect your personal and/or your organization’s situation.

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