Please note that this legal alert provides general information about Federal legislation and is not legal advice. This Legal Alert is dated December 29, 2020, and may become outdated as new forms, regulations, FAQs are released by the Department of Treasury and Small Business Administration. This Legal Alert does not create an attorney-client relationship. You may want to speak with an accountant or attorney about whether your organization should apply for funding or forgiveness. If your organization needs Covid-related legal or capacity building support contact us. For non-Covid-related support, email us at email@example.com or check out our website at communities-rise.org.
The new Covid-19 Relief legislation provides support for nonprofits and small businesses
President Trump signed the Covid-19 Relief bill on Sunday, Dec. 27, 2020. The legislation covers many areas. This Legal Alert highlights particular provisions that we believe will impact nonprofits and small businesses.
1. PPP loan expansion: $284 Billion for a new round of PPP Loans extending the program through March 31, 2021 and provides for a second draw for eligible nonprofits and small businesses. Note that eligibility criteria for a second draw are different from the first round. Also expands eligibility to qualified 501(c)(6) orgs. See National Council of Nonprofits summary for details.
2. Simplified Forgiveness for borrowers with loans of $150,000 or less. The legislation also expands the definition of forgivable expenses. See National Council of Nonprofits summary for details.
3. EIDL Loans: $20 Billion for extension of the program through Dec. 31, 2021, targeting small businesses in low-income communities.
4. Extends and expands Employee Retention Tax Credit through July 1, 2021.
5. Extends the refundable payroll tax credits for paid family sick leave under the Families First Coronavirus Response Act through March 31, 2021.
6. Extends the $300 above the line charitable tax deduction for 2021.
For more details, please see a table summary of the provisions created by National Council of Nonprofits (dated December 21, 2020).
We are not able to offer much detail on this legislation because the details are not yet available. The National Council of Nonprofits provides a summary of the available details on the each of the above-listed provisions. The Department of Treasury and the Small Business Association will issue new forms, regulations and FAQs to implement these legislative changes in the coming weeks. We will be watching for these regulations and posting them on our website.
We recommend contacting your lender who will have information about their PPP loan application processes and forgiveness process.
PPP Updates and Forgiveness Training
Communities Rise, in partnership with Washington Nonprofits, will be hosting a legal training on PPP Updates and PPP Forgiveness on January 21, 2021, that will go into more detail on this legislation and provide up-to-date.
Covid-19 Small Business and Nonprofit Legal Clinic
Communities Rise is offering free 60-minute legal clinic consultations by phone or video conference for small businesses and nonprofits with 50 or less employees who have been negatively impacted by Covid-19. Please note that the Covid-19 Legal Clinic will be closed during the holiday break (December 21, 2020 – January 3, 2021) to give our staff a much needed break. The Covid-19 Legal Clinic will be open again on January 4, 2021. Request a legal consultation for 2021 here.