Congress recently passed the Coronavirus Response and Relief Supplemental Appropriations Act, 2021(H.R. 133) to provide more than $900 billion in emergency assistance for individuals, families, nonprofits and businesses impacted by the COVID pandemic. For the first time, these loans are available to nonprofit associations and other 501(c)(6)organizations. Join Lisa McKinney and Chad Singletary as they provide guidance on how your organization can benefit.
501(c)(6) nonprofits can apply for PPP loans under the following criteria:
•The organization does not receive more than 15 percent of receipts from lobbying activities
•The lobbying activities do not comprise more than 15 percent of total activities
•The cost of lobbying activities of the organization did not exceed $1,000,000 during the most recent tax year that ended prior to February 15, 2020
•The organization has 300 or fewer employees
Beyond PPP expansion to nonprofit associations and other 501(c)(6) organizations, the year-end legislation includes several important provisions for first–and second–PPP applicants. Loans are available until March 31, 2021.
•The loan forgiveness process is simplified for loans of $150,000 or less. •Organizations with 300 or fewer employees that can demonstrate a revenue decline of at least 25-percent in any quarter in 2020 over the same quarter in 2019 can receive a second PPP loan of up to $2 million.
•$35 billion of the PPP funds are reserved for first time loan recipients.
•Forgiven PPP loans will not be classified as income and tax deductions are now allowed for expenses paid with proceeds of forgiven PPP loans.
There are other provisions of the Act that may benefit certain organizations including Economic Injury Disaster Loans (EIDL), an additional $20 billion was added to the EIDL Program. There is also the Employee Retention Tax Credit (ERTC).