Serving Nonprofits. Strengthening West Virginia.

Federal Relief for Nonprofits: A Breakdown of Options and Resources

A Breakdown of Federal Relief Options

With all the constantly evolving information out there on federal assistance options for nonprofits, it’s easy to feel confused and overwhelmed! Here at the WVNPA, we are working hard to help you navigate the opportunities that the Federal CARES Act and 2 – and now the American Rescue Plan Act – has for organizations like yours. As the situation evolves, rest assured that we will continue to update this page and our Coronavirus Preparedness landing page with information you need to make the best decisions for your organization.

American Rescue Plan Act

President Biden signed the American Rescue Plan Act on March 14, 2021, enacting one of the largest economic relief programs in U.S. history. The Act,  among other things, provides an additional $125 billion in funding for COVID-19 vaccines, treatment, and testing; approves $1,400 stimulus checks per person for most individuals and families; extends additional federal unemployment benefits into September and exempts more than $10,000 in these benefits from federal income taxation; increases the child tax credit and earned income tax credit; and extends the tax credit for nonprofits and other employers that voluntarily provide paid sick leave and paid family and medical leave through September 30, 2021. The law also provides more funding for food assistance, housing and homelessness prevention, the Paycheck Protection Program and the Shuttered Venue Operator Grant program, childcare providers, arts and humanities organizations, the Corporation for National and Community Service, and assistance for nonprofits providing services to survivors of domestic violence and sexual assault.

Our friends at the National Council of Nonprofits summarized the key provisions that impact nonprofits here. For your convenience, here are the highlights specifically related to your nonprofit work:

SBA

  • Paycheck Protection Program:
    • Adds $7.25 billion to the program
    • expands the eligibility to
      • charitable nonprofits that operate at multiple locations and employ not more than 500 employees per physical location, and
      • other types of nonprofits, but with a 300-employee limit per location.
    • There are NO CHANGES to the Second draw PPP loans eligibility. 
    • The deadline for PPP application remains UNCHANGED and is March 31, 2021 unless extended by Congress.
  • Economic Injury Disaster Loan:
    • The bill allocates $15 billion for the Targeted EIDL Advance program. 
      • $10 billion of the allocation is to be used by the SBA to fulfill payments to covered entities that did not receive the full amount they were entitled. 
      • The remaining $5 billion is to be used for entities that suffered a loss of at least 50% and have 10 or fewer employees.
  • Shuttered Venue Operators Grant Program (SVOG)
    • Additional $1.25 billion
    • REPEALS prohibition on applying for funds under both the PPP and SVOG
    • Allows SVOG applicants to reduce the grant value by the amount of a PPP loan received in 2021

Tax Provisions

  • Unemployment Insurance & Self-Insured Employers:
    • Extends through September 6, 2021 the federal payment for a portion of the unemployment costs of reimbursing nonprofits
      • 50% through March 31st
      • 75% from April 1st – September 6th
  • Employee Retention Tax Credit (ERTC)
    1. Extends the tax credit through December 31, 2021
  • Paid Leave Tax Credits for Employers
    • Extends through September 30,2021 the refundable payroll tax credits established in the Families First Coronavirus Response Act
    • Increases the amount of wage an employer can claim from $10,000 to $12,000 per employee
    • Expands leave to cover vaccinations and any resulting injury or illness related to vaccination

Selected Key Provisions

  • Aid for State, Local, Tribal, and Territorial Governments
    • $350 billion in aid, permissible uses include
      • Providing “assistance to households, small businesses, and nonprofits, or aid to impacted industries”
  • Nutrition Assistance (Title I)
    • Extends 15% increase to SNAP benefits through Sept. 30, 2021
    • Extends Pandemic EBT Program
    • Funding to make the WIC program more user-friendly
    • Increases the Cash Value Voucher benefit
  • Health (Title II)
    • $7.6 billion to community health centers, $1.44 billion for Older Americans Act programs, $800 million for the National Health Services Corps
    • Temporary 7.35 percentage point increase in the federal share of Medicaid for Home- and Community-Based Services
  • Education (Title II)
    • $125 billion in funding for K-12 schools
    • $40 billion to colleges and universities, which half devoted to emergency student financial aid grants and half available to defray lost revenue and increased costs
    • $39 billion for childcare
    • $350 million in additional funding for Child Abuse Prevention and Treatment Act (CAPTA) programs
    • $7.2 billion to the FCC to expand broadband access to support remote learning
  • Cultural (Title II)
    • $135 million each to the National Endowment for the Arts and the National Endowment for the Humanities
    • $200 million for libraries through the Institute of Museums and Library Services
  • Volunteerism (Title II)
    • $1 billion the AmeriCorps to increase the number of participants and stipends
  • Housing (Title III)
    • Nearly $22 billion in Emergency Rental Assistance to augment funds provided in December
    • 5 billion for communities to provide supportive services for families and individuals experiencing homelessness.

CARES 2 Nonprofit Information

Congress passed and the President signed the Omnibus Appropriations and Emergency Coronavirus Relief Act, a 5,593-page conglomeration of legislation that incorporates twelve annual spending bills to fund the federal government, a collection of COVID relief measures, and a variety of tax and other provisions. The legislation funds the federal government through September with spending of $1.4 trillion and largely follows the bipartisan spending agreement reached last year. The main focus of the CARES 2 relief bill is on money for families, small businesses, schools, transportation, food, and health. Nonprofits are at the heart of many parts of our economy, so nonprofits are affected throughout. Our friends at the National Council of Nonprofits summarized the key provisions that impact nonprofits here. For your convenience, here are the highlights specifically related to your nonprofit work: 
 

  • More Time for the Coronavirus Relief Fund: The bill removes the risk that state and local governments would have had to return unspent CARES Act money by December 30th by extending the deadline until the end of 2021.
  • PPP Second Draw: Most notably, the legislation authorizes a Second Draw of Paycheck Protection Program loans begins **January 13th, 2021** for qualified employers. Charitable nonprofits (as well as for-profit businesses) may qualify for a Second Draw loan 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. This second round is much narrower than the PPP loans granted under the CARES Act, both in terms of maximum loan amounts and eligibility factors. 
  • PPP Loan Forgiveness: The legislation expands the types of expenses eligible for forgiveness to include the costs of personal protective equipment and workplace modifications. It also authorizes a short-form approval of forgiveness for loans of $150,000 or less.
  • Economic Injury Disaster Loan Grants: The bill allocates $20 billion for additional $10,000 grants. It also repeals retroactively a requirement that EIDL grant recipients must pay back the $10,000 grants even when PPP loans were forgiven.
  • Charitable Giving Incentives: The legislation re-establishes the temporary $300 above-the-line deduction for people who do not itemize their deductions and establishes a $600 deduction for couples filing jointly in 2021. It 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.
  • Relief for Reimbursing Employers: Congress approved a 10-week extension – until March 14 – of a provision that requires the federal government to cover half of the costs of unemployment benefits paid to laid-off and furloughed employees of “reimbursing” employers. Nonprofits that self-insure under their state’s unemployment systems had faced an automatic doubling of unemployment costs payable to their states starting January 1, 2021.
  • Save Our Stages: Congress dedicated $15 billion to aid performance venues, independent movie theaters, and cultural institutions. Covered organizations may seek grants of up to $10 million.
  • Employee Retention Tax Credit (ERTC): The bill extends the earlier credit for retaining employees for six months (to 7/1/2021) and expands the usefulness of the refundable payroll tax credit, particularly for nonprofits excluded from Paycheck Protection Program (PPP) participation. It reduces the required decline in gross receipts from 50% to 20%, increases the refundable payroll tax credit from 50% to 70%, and covers 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: The bill 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.

(Original CARES ACT – 2020)
The CARES Act provided five opportunities for nonprofits:

  1. Delay of Payroll Tax Remittance
    • This provision is to help with cash flow for organizations.
    • You can elect to defer the submission of the employer portion of payroll taxes (6.2% Social Security) between 3/27/20 and 12/31/21.
    • 50% of those monies will be due on 12/31/21 and the remaining 50% will be due on 12/31/22.
    • You are excluded from this program if you participate in the Paycheck Protection Program/Loan (see below).

  2. Employee Retention Credit
    Section 2301 of the CARES Act creates a refundable payroll tax credit against Social Security taxes of up to $5,000 for each employee on the payroll when the conditions mentioned below are met. There are 3 eligibility requirements:
    • You were in business: You don’t get an employee retention credit if you don’t “retain” employees and don’t continue operating during the 2020 COVID-19 crisis. Congress provides this generous credit to subsidize employers who continue to operate.
    • You were disrupted: Because either 1) you had to fully or partially suspend operations due to a governmental order related to COVID-19, OR 2) your gross receipts in 2020 decreased by 50% over the same quarter time period in 2019.
    • You don’t receive a loan through the Paycheck Protection Program (PPP): You lose eligibility for the retention credit if you take a loan through the PPP (see below) – the government has put some safeguards in place to prevent double dipping to cover the same expenses.
    • Two more parameters:
      • If you have more than 100 employees, the credit applies when wages are paid to employees when they are not providing services due to the coronavirus-related circumstances described above. Imagine a scenario where you keep all of them on the payroll and pay them to stay home because the type of service/work you provide cannot be done via telework, this qualifies. If, however, you lay off all of your employees, you’ll have no payroll and therefore nothing to get a credit against.
      • If you have less than 100 employees, the credit applies to all employee wages whether the employer is open for business or subject to a shut-down order.
         
  3. Paycheck Protection Program (PPP)
    An SBA loan that helps businesses keep their workforce employed during the Coronavirus (COVID-19) crisis. This program will be available through June 30, 2020.

  4. Expanded SBA Economic Injury Disaster Loans and Loan Advance 
    Disaster loans for eligible nonprofits and other applicants with 500 or fewer employees.

  5. Emergency Paid Sick Leave and Emergency FMLA
    Implemented April 1, 2020, the U.S. Department of Labor announced new action regarding how American workers and employers will benefit from the protections and relief offered by the Emergency Paid Sick Leave Act and Emergency Family and Medical Leave Expansion Act, both part of the Families First Coronavirus Response Act (FFCRA).

Still Have Questions?
In addition to the information above, we invite you to explore the following resources or visit our Coronavirus Preparedness webpage:

If You Need More Assistance
Please note that if you need it, you should seek advice from an attorney, accountant, or your lending bank – as appropriate. The WVNPA is set up to share information, connect you with resources, and get your questions answered whenever possible, but we do not advise nonprofits on accounting, loan, or labor issues.

We’re Here For You
Again, the WVNPA is your partner in finding resources for your nonprofit decisions regarding this pandemic. If you have questions that are not answered in the above resources, please submit a question to our Federal Coronavirus Relief for WV Nonprofits Feedback Form. We will do all we can to help you find the answers. Thank you for all you do for our communities in the Mountain State!

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