Congress has passed three different pieces of legislation to address the impact of COVID-19. Several components of those new laws can help nonprofits survive.
Paycheck Protection Program
The Paycheck Protection Program builds on the Small Business Administration’s (SBA) emergency loans. The loan can pay for 8 weeks of employee salary, benefits, and payroll costs, plus mortgage, rent, and utility costs. It excludes payroll costs for employees making more than $100,000. If you retain your staff through June 30, 2020, any loan proceeds will be forgiven. 501(c)3 nonprofits with less than 500 employees are eligible. The maximum loan size is 2.5 times your average monthly payroll, up to $10 million. The SBA has information on their website. You apply through a local lender and applications open on Friday, April 3 and the money ($350 billion) is expected to go quickly.
Sick and Family Leave Paid by the Government
This provision requires employers with fewer than 500 employees to provide employees affected by COVID-19 with paid sick leave and paid family/medical leave. Employees must be provided with: up to 80 hours of paid sick leave at their regular rate if they are unable to work due to being quarantined or experiencing COVID-19 symptoms or up to 80 hours of paid sick leave at two-thirds their rate of pay to care for a child whose school/child care is closed due to COVID-19 or to care for an individual sick with COVID-19. Additionally, employers must provide up to an additional 10 weeks of paid family and medical leave at two-thirds their rate of pay if they cannot work due to being quarantined or sick, or are caring a child whose school/child care is closed or a sick individual. Employers paying for the leave can claim a refundable payroll tax credit or can request a refund from the federal government if the amount exceeds your regular payroll taxes. More information is also available on the Department of Labor’s website.
Expanded Charitable Deductions
For 2020, individuals can deduct up to $300 for cash donations made to charities this year even if they take a standard deduction. Limits for corporate contributions to charitable organizations was also increased from 10% of their taxable income to 25%.
There is also expanded unemployment. Changes include: allowing people to immediately enroll in unemployment without waiting a week, people impacted by COVID-19 are eligible for 39 weeks of employment benefits, and normal unemployment benefits will be boosted by $600 per week until July 31, 2020. More information is available on the Department of Labor’s Career One Stop Center.
Thanks to our friends at Safe Routes Partnership for summarizing these supports for non-profits!