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Spur Impact Exec Outlines the CARES and What It Means for DE Nonprofits

The Paycheck Protection Program, Emergency Economic Injury Disaster Loans, and Tax Provisions are parts of federal government’s CARES Act in response to the coronavirus pandemic that are relevant to Delaware nonprofits, according to Charlie Vincent, Executive Director of Spur Impact. Vincent provided a bullet-pointed summary of these provisions as well as analysis on the Delaware nonprofit’s website today. Vincent summarized as follows: 

PAYCHECK PROTECTION PROGRAM (PPP) (SECTION 1102)

• Nonprofits organized under 501(c)(3) and veterans organizations under 501(c)(19) are eligible for the PPP. All other nonprofits are not eligible.
• In general, eligible nonprofits can borrow the lesser of $10 million or 2.5 times their average monthly payroll costs for the past twelve months (including salaries) (plus any EIDL debt, should they take out an EIDL). PPP loans are first come first serve.
• In general, eligible nonprofits can apply for forgiveness of most, if not all of the borrowed amount, namely 8 weeks of payroll costs (including salaries, state and local taxes, and other benefits), rent, transportation costs, and utilities (telephone, internet).
• The loan is payable in two years and the interest rate is 1%. You can get one PPP loan.
• Entities cannot take both a PPP loan and the Employee Retention Credit (Section 2301).
• Borrowers must complete the SBA Form 2483 (Paycheck Protection Program Application Form) and provide payroll documentation

EMERGENCY ECONOMIC INJURY DISASTER LOANS (EIDL) (SECTION 1110)

• All private, non-governmental nonprofits as well as nonprofits exempt under Section 501(c), 501(d), and 501(e) are eligible for an EIDL.
• In general, eligible nonprofits will be able to borrow up to $2 million at an interest rate capped at 2.75% for a maximum of 30 years.
• Nonprofits that apply will receive a $10,000 emergency grant, which will not need to be repaid, even if the nonprofit ultimately is denied the loan.
• Nonprofits can apply for both an EIDL and the PPP. EIDL funds cannot be used for the same expenses as the PPP loan.
• Should you take both and seek loan forgiveness under the PPP, the $10,000 EIDL grant will be subtracted from the amount forgivable under the PPP.

OTHER TAX PROVISIONS AFFECTING NONPROFITS (SECTIONS 2204, 2205)

• For at least 2020, all taxpayers get an above-the-line deduction of up to $300 for charitable cash donations. For at least 2020, those taxpayers who itemize no longer have a cap on charitable deductions.
• For at least 2020, corporation limits on charitable deductions have been raised from 10% to 25%, with provisions to carry over excess contributions in subsequent tax years

Read the complete article here:  https://spurimpact.org/news/2020/4/3/a-summary-of-the-cares-act-for-delaware-nonprofits

Download a PDF here: 2020-04-03+A+Summary+of+the+CARES+Act+for+Delaware+Nonprofits

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