Thanks to CalNonprofits for collecting and sharing this information!
As the Coronavirus crisis unfolds, our organizations have been focused on how to best serve small businesses in these challenging times. But the outbreak also affects us, our staff, and our operations, and many nonprofits have growing questions and are looking for guidance. Below are the top five concerns from nonprofits and resources to help address them.
Accessing emergency government dollars to cover payroll and other expenses
CARES Act (Federal)
The CARES Act will provide $150 billion for a state, tribal, and local government Coronavirus Relief Fund. California will receive a portion of that fund but so far it is unknown how the money will be distributed.
CalNonprofits will be advocating at the state level to ensure that nonprofits get a significant portion. (We have already begun gathering data to estimate the economic impact of COVID-19 on California nonprofits.) Nonprofits may also be able to benefit from the Industry Stability Fund included in the Act, but it is currently unclear whether we qualify.CalNonProfits
SBA Loans (Federal)
- Economic Injury Disaster Loan (EIDL) Program. This program offers low-interest loans of up to $2 million (at 2.75% interest rate) to nonprofits of all sizes in declared disaster areas. These loans can be used to pay payrolls, accounts payable, fixed debts, or other expenses affected by the COVID-19 crisis. The CARES Act expansion of this program includes an emergency advance of up to $10,000. To apply, click here.
- Paycheck Protection Program (PPP). This program provides loans of up to $10 million to nonprofits with no more than 500 employees. Recipients can use these loans for payroll, bills, and other expenses incurred between February 15 and June 30, 2020. Interest rates are capped at 4% but up to 100% of the loan can be forgiven depending on employee retention. The online application process is not available yet but you can find a sample application here. For more information, contact your local SBA bank.
S.B. 89 (California)
This bill will allocate up to $1 billion in state emergency funds for COVID relief through the inclusion of assistance strategies that help impacted nonprofits in the 2020 state budget.
Other financial benefits available to California nonprofits
State payroll tax extension
Nonprofits directly affected by COVID-19 can apply for a 60-day extension to file state payroll taxes without penalty or interest. The request must be received within 60 days from the original past-due date of the payment or return. Go to the California EDD to apply.
Key: nonprofits (and all employers) can use their expenses for new leave provisions as credits against payroll taxes.CalNonprofits
Federal payroll tax delay
Nonprofits that have temporarily closed or suffered loss of revenue during the COVID-19 crisis can delay paying the employer portion of Social Security (6.2% of wages).
Mortgage and rent delays
California individuals a 60-day moratorium on evictions and a 90-day grace period for mortgage payments. At the moment there is no relief for nonprofits and businesses, but several bills are pending in Congress to address this.
Relief for unemployment insurance self-insurers
The CARES Act includes reimbursement of up to 50% of unemployment costs for employers that use a self-insured fund such as Unemployment Services Trust.
Filing extension for Form 990
Since nonprofits are exempt from income tax, the CARES Act extension for filing tax returns until July 15 does not apply to Federal Form 990. However, nonprofits can apply for a six-month extension by filing Form 8868, which will be automatically granted if you apply by the date your 990 is due.
Benefits for current and laid-off staff
For current staff
- Cal/OSHA offers safety guidance to protect employees at healthcare clinics and childcare centers. You can also find public health flyers in 30+ languages and posters in a few languages from the CDC.
- Covered California has extended its enrollment period to the end of June.
- The Families First Coronavirus Response Act expanded on FMLA to require paid sick leave and paid family leave.
- If your employees are working from home, you are advised to put risk management systems in place and check with your insurance broker to make sure your employees are covered by workers’ compensation insurance.
For laid-off workers
- Let your laid-off staff know how to apply for unemployment benefits. The usual one-week waiting period has been waived, but it may take up to three weeks before the money is deposited into their account. Staff with reduced hours can also apply for unemployment benefits.
- Independent contractors are not eligible for unemployment insurance but they can apply for Disaster Assistance.
- Laid-off staff can also enroll in Covered California.
Charitable tax deduction
With the 2018 federal Tax Cuts and Jobs Act, a majority of people who were itemizing on their taxes no longer found it financially beneficial to do so. As a result, for millions of households, donations to nonprofits no longer reduce their taxes. The CARES Act allows – for the 2020 tax year – households to take up to a $300 tax deduction for donations to nonprofits even if they are not itemizing (that is, if they are taking the standard deduction). They will still need to have receipts and documentation of their donations.CalNonprofits