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COVID-19 Updates & Resources

Legal Counsel for Philanthropy and the Nonprofit Sector

Information and resources on nonprofit law & regulation

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COVID-19 Legal Updates and Resources for Nonprofit Organizations

  1. CARES Act: Loans and Grant Programs
  2. CARES Act: Charitable Giving Incentives
  3. IRS Form 990 Filing Deadline Extension
  4. Selected State Resources
  5. Other Resources

CARES Act: Loans and other Emergency Benefits

Nonprofit organizations are eligible for a number of new loans, grants and tax credits created by the CARES Act. Experts recommend contacting your bank as soon as possible to discuss your organization's eligibility for the many new programs. Read more on the Small Business Administration's website regarding Coronavirus Relief Options. The National Council of Nonprofit Organizations has created a helpful chart outlining the various loans available to nonprofits and The Chronicle of Philanthropy has an article on applying for these loans and emergency benefits.

Paycheck Protection Program - This program provides loans of up to the lesser of 2.5 times an organization's monthly payroll or $10 million. It is designed to encourage organizations to keep their employees on payroll during the Coronavirus crisis. Organizations with less than 500 employees are eligible and the loans can be used to pay for payroll costs, rent, utilities and other expenses incurred between February 15 and June 30 of 2020. Forgiveness of the loan in part, or in whole, may be possible. Organizations should complete the Small Business Association's application (see below) and submit it to their local bank or credit union which must be an existing SBA 7(a) lender or a federally insured depository institution, federally insured credit union, or Farm Credit System institution.

Economic Injury Disaster Loan "EIDL" Emergency Advance - This program provides special advances of up to $10,000 to small businesses and nonprofit organizations. The organization must either have fewer than 500 employees or meet the SBA's size standards for the NAICS code associated with its primary industry. The "loan advance" is to be paid to the applicant within days of a successful application and does not have to be repaid. Applications are completed online at the SBA website (see below).

Low Interest Disaster Loans - Larger loans of up to $2 million are also available through the SBA's EIDL program. Again, the organization must have fewer than 500 employees or meet the SBA's size standards for the NAICS code associated with its primary industry. Unlike the "loan advance" described above, these loans must be repaid. However, nonprofit organizations qualify for a rate of 2.75% and terms of up to 30 years are available. Applications are completed online at the SBA website (see below). Note that loans are also available for disasters unrelated to COVID-19. Those applications are also completed online here.

Employee Retention Credit - Nonprofit employers of all sizes are eligible for this credit. However, if the organization takes one of the small business loans mentioned above it is not eligible. To qualify for this credit your organization must either be fully or partially suspended by government order due to COVID-19 during a given calendar quarter, or its gross receipts must be below 50% of the comparable quarter in 2019. If you qualify based on gross receipts, then once gross receipts exceed 80% of the comparable quarter in 2019 you no longer qualify after the end of the given quarter. The credit is claimed when filing the quarterly IRS Form 941. Advance payment may also be requested using the new IRS Form 7200.

CARES Act: Charitable Giving Incentives

The CARES Act included a number of charitable giving incentives for individuals and businesses. Included in these incentives are the following;

Universal Charitable Deduction - This incentive provides a tax deduction for those who take the standard deduction ($12,400 for those filing singly, $24,800 for married filing jointly, $18,650 for heads of households) and who make cash gifts of up to $300 for the 2020 tax year. Note that in order to qualify for this "above-the-line" deduction, the donation(s) must be made to public charities excluding donor advised funds and supporting organizations under IRC Section 509(a)(3). Read more at the Chronicle of Philanthropy.

AGI Limitation Eliminated - For those taxpayers who itemize their deductions, the deduction for donations of cash is normally capped at 60% of a taxpayer's adjusted gross income. For the 2020 tax year, that cap has been eliminated. Therefore, it is conceivable that a donor could entirely eliminate his or her Federal income tax liability by offsetting their adjusted gross income under this provision. As with the universal charitable deduction above, this only applies to gifts of cash made to public charities. Gifts to donor advised funds and supporting organizations are excluded. 

Corporate Charitable Deduction Increased - The CARES Act also increased the percentage of a corporation's taxable income that may be offset by charitable contributions. The previous limit of 10% was increased to 25% for the 2020 tax year. As with the other incentives above, this only applies to gifts of cash made to public charities other than donor advised funds and supporting organizations.

IRS Form 990 Filing Deadline Extension

On April 9th, 2020 the IRS announced extensions to Form 990 filing deadlines for tax-exempt organizations. The extensions apply to annual Form 990 returns due on April 15, May 15, or June 15. The new filing deadline is July 15 for all organizations with returns normally due on these dates. This announcement is the latest guidance from the IRS in a rapidly-evolving situation. Due to disruptions caused by the COVID-19 pandemic, filing requirements for the Form 990 series, including 990EZ, 990PF, and 990T, may be subject to further change. For the most up-to-date information please check the IRS Exempt Organization website.

Selected State Resources

California

Florida

Massachusetts

New York

Additional Resources

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