Coronavirus Aid, Relief, and Economic Security (CARES) Act Overview for Churches/Non-profits

1. Federal Resource Links:

1. USA.GOV Coronavirus Resources

2. CDC Coronavirus Resources

3. Small Business Administration

i. Local Assistance Hotline2. What’sInsidetheSenate’s$2TAidPackage

a. Individuals:

1. Cash payments to individuals: Most individuals earning less than

   $75,000 can expect a one-time cash payment of $1,200. Married couples would each receive a check and families would get $500 per child under the age of 16. That means a family of four earning less than $150,000 can expect $3,400.

   1. SupportfadesforAGI’sgreaterthanabove,phasingout completely for individuals with an AGI greater than$99,000 and couples greater than $198,000.

2. Tax returns:The filing deadline for 2019 has been extended to July 15. The IRS also says that people who have filed or plan to can still expect to receive a refund if they are owed one.

3. Insurance coverage: The bill requires all private insurance plans to cover COVID-19 treatments and vaccines and makes all coronavirus tests free.

4. Temporary student loan relief: All loan and interest payments would be deferred through Sept. 30 without penalty to the borrower for all federally owned student loans.

5. Retirement Plan distributions1:

1. Penalty-free distributions up to $100,000 in coronavirus

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related distributions without the customary 10% penalty tax for those under 59.5 years of age (but still taxable income).

1. Mandatory 20% income tax withholding suspended for rollovers distribution.

2. Regular income taxes can be paid over a three-year period.

2. Forplansthatallowloans,employeescanborrowuptothe lower of $100,000 or vested account balance within 180 days

1 Bradley, et al, LLP

of March 27th (CARES Act enactment). Loan repayment due

dates delayed one year.
3. Required Minimum Distributions (RMD’s) waived in 2020.

vi. Temporary Mortgage relief2:
1. Mortgage Forbearance- Borrowers with federally backed

mortgages are eligible for mortgage forbearance under Section 4022 of the CARES Act.

a. Individuals with single-family mortgages may write to their mortgage servicer requesting forbearance for 180 days due to COVID-19-related difficulties.

2. ActincludesForeclosuremoratorium,EvictionProtection(30 day delay), Credit Reporting Adjustments and Loan Amortization schedule adjustments as a result.

vii. State/local funding:1. Economic Relief Fund- Bills, Rent, Food.

a. Call 1-866-211-9966 and provide Zip Code and a list of local agencies will be given

b. Employees

i. DOL Workplace Resources/Safety1. Paid Time Off-The Families First Coronavirus Response Act

(FFCRA or Act) requires certain employers to provide their employees with paid sick leave and expanded family and medical leave for specified reasons related to COVID-19. These provisions will apply from April 1, 2020 through December 31, 2020.

c. Churches/Small Businesses

1. CDC for Workplace Guidance

2. Paycheck Protection ProgramApplication

1. Provides loans of up to $10 million to support expenses incurred from Feb. 15, 2020 – June 30, 20203.

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a. Maximum loan = 2.5 x Average total monthly payroll costs for 2019, if in business, less dollars above $100k in any single annualized salary.

1. Otherwise, annualized average from 1/1/20 to 2/29/20.

ii. Up to eight weeks of eligible expenses during the covered period can be forgiven from the

2 Yale School of Management3 ESD.SBA

loan principal as long as the employer maintains previous payroll counts during this emergency.

b. Forgivablecostsapplicable:

i. Eligible expenses include payroll support, such as employee salaries, paid sick or medical leave, insurance premiums, rent, and utility payments.

1. Payroll

   1. Any compensation, to inc

      contractors (not an amount prorated above $100k annualized);

   2. Benefits/payroll taxes/leave

   3. Dismissal/separation

2. Paymentofrentonleasepriorto

   February 15, 2020;

3. Payment on any utility for which service

   began before February 15, 2020.

c. PPP loan repayments will be deferred for six months.

Lenders can elect to defer the loan for a total of twelve

months.

1. Interest rates associated with PPP loans will be at a

   maximum 4% per annum.

2. There will be no fees to apply or prepayment.

3. There are not collateral requirements or personal

   guarantees for the loan

4. Additional details of PPP will be provided as the SBA

   regulations, which the CARES Act requires to occur

   within 15 days of March 27, 2020.

5. Potential 30 day loan approval process.

6. Deadline to apply 6/30/20

7. Lender has 60 days to review and approve the

   forgiveness request.

2. EconomicInjuryDisasterLoan

1. Application

2. Provides small businesses with working capital loans of up to $2 million that can provide vital economic

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support to small businesses to help overcome the temporaryloss of revenuethey are experiencing4.

i. Emergency grants: up to $10,000 to provide emergency funds for small businesses to cover immediate operating costs.

1. The expedited loan is intended to help cover operating expenses for businesses while their loan application is processed.

c. This is a 2.75% LOAN (non-profit rate listed). iii. Express Bridge Loans don’t apply.

References

USA.gov Coronavirus
DOL: Coronavirus Resources
H.R. 748 CARES Act.
NPR: What's Inside The Senate's $2 Trillion Coronavirus Aid PackageEmpire State DevelopmentNational Law Review
FRC blog
Front Porch News
Church and Tax Law Webinar 4/2/20
NY Coronavirus Resources
U.S. Chamber of Commerce Coronavirus Guide

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4 SBA Disaster Loan Assistance