Updated April 8, 2020 *REFRESH PAGE FOR NEWEST UPDATES*
The Federal government has recently issued several releases relevant to tax credits under the Families First Coronavirus Relief Act (FFCRA) and the Coronavirus Aid, Relief, and Economic Security (CARES) Act; and relevant to the loans available under the Paycheck Protection Program.
Below outlines recent guidance on the coronavirus-related Federal Loans and Tax Credits.
- Paycheck Protection Program (PPP) Loans, under Coronavirus Aid, Relief, and Economic Security (CARES) Act
This loan program offers funds to cover operating expenses for organizations with fewer than 500 employees, for up to 8 weeks of payroll costs and benefits, utilities, and rent payment or interest on a mortgage. The loans are fully or partially forgivable depending on the extent to which the employer maintains/re-establishes salary levels and full-time employee headcount, and if at least 75% of the monies were used on payroll. Employers apply directly to their local SBA Participating Lender or other institution. The application process for PPP loans for nonprofits began Friday, April 3.
- Application form for Paycheck Protection Program (PPP) loans: https://home.treasury.gov/system/files/136/Paycheck-Protection-Program-Application-3-30-2020-v3.pdf
- Information sheet regarding PPP loans: https://home.treasury.gov/system/files/136/PPP–Fact-Sheet.pdf
- PPP Toolbox (from FMA): Uuseful resources to help nonprofits navigate the PPP process, including recorded webinars and free clinics where nonprofits can have questions answered:
- COVID-19 Economic Injury Disaster Loan and loan advance, under the CARES Act
These low-interest loans (2.75%) provide economic support to small businesses—including nonprofits—to help overcome the temporary loss of revenue they are experiencing as a result of the COVID-19 pandemic. Qualified applicants may borrow up to $2 million, and are eligible for an advance on the loan of up to $10,000. The advance may be forgiven.
- General information on loan and advance: https://www.sba.gov/funding-programs/loans/coronavirus-relief-options/economic-injury-disaster-loan-emergency-advance
- Online application: https://covid19relief.sba.gov/#/
- A more detailed summary and comparison of the two loan programs can be found here: https://pbpohio.org/wp-content/uploads/2020/04/2020-April-2-Legal-Alert-CARES-Act-and-Nonprofits_Article.pdf
Refundable Payroll Tax Credits
- Credits for Sick Leave and Family Leave, under Families First Coronavirus Relief Act (FFCRA)
The FFCRA provides small- and midsize-employers refundable tax credits that reimburse them, dollar-for-dollar, for the cost of providing paid sick and family leave wages to their employees for leave related to COVID-19.
- FAQs regarding the FFCRA tax credits: COVID-19-Related Tax Credits for Required Paid Leave Provided by Small and Midsize Businesses FAQs.
- Credits for Employee Retention, under CARES Act
This tax credit program is designed to encourage eligible employers to keep employees on their payroll, despite experiencing economic hardship related to COVID-19.
- FAQs regarding the CARES Act tax credits: FAQs: Employee Retention Credit under the CARES Act.
- Apply for tax credit advances under either tax credit program:
As always, we are available to address your COVID-related questions (or any legal questions!) as best we can. Needless to say, this is a rapidly-changing environment, and we are all doing our best to stay abreast of the latest news. Please contact us at email@example.com, or reach out directly to your local Pro Bono Partnership lawyer by email. Also, please check out other information on our COVID-19 Resources webpage.