2021 COVID Relief Package-What It Means for Nonprofits

The COVID Relief Package Passed… Now What?

By Hilary Fulp
Consultant

This week’s passing of the COVID Relief Package or the Omnibus Appropriations and Emergency Coronavirus Relief Act impacts all of us. The Act is robust with details and information, so we are here to provide you with the most up-to-date and useful information. Below are a few key points that directly pertain to nonprofits:

• Paycheck Protection Program (PPP) – Allows a second draw of PPP loans for charitable nonprofits (as well as for-profit businesses) of up to $2 million if the organization employs no more than 300 employees and suffered a decline in gross receipts of 25% in one of the four quarters in 2020 compared to the same quarter in 2019.  Expands forgivable expenses to include personal protective equipment and workplace modifications. Simplifies the forgiveness application process for loans equal to or less than $150,000.
• Charitable Deductions — Reestablishes an above-the-line universal charitable deduction for non-itemizers, for cash gifts only up to $300. Adds a $600 deduction for couples filing jointly. Extends through 2021 the increased limits on deductible charitable gifts for itemizers and corporations.
• 2020 CARES Act Funding- Extends the deadline for state and local governments to spend CARES Act dollars from 12/31/2020 to the end of 2021.
• Save our Stages – Dedicates $15 billion to aid performance venues, independent movie theaters, and cultural institutions. Covered organizations may seek grants of up to $10 million.
• Tax Credits – Employee Retention Tax Credits are extended for six months and are expanded for nonprofits excluded from PPP participation by reducing the required decline in gross receipts, increasing the refundable payroll tax credits and covering 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 ERTC for wages not paid with forgiven PPP funds. Paid Sick Leave Payroll Tax Credit for paid sick and family leave is extended through March. The increased income tax credit for family and medical leave is also extended through 2025.

For further information, you can find a section-by-section breakdown of the legislation, and you can read further analysis from our colleagues at the National Council of Nonprofits in this document.

These have been and continue to be challenging times. We are here for you. Please reach out with questions or to discuss how we can help you grow your fundraising success!