5 Things to Know About the CARES Act
The Coronavirus Aid, Relief, and Economic Security (CARES) Act, a relief bill designed to address the economic impact of the COVID-19 pandemic, provides a number of resources to aid small businesses and nonprofits as they navigate through the crisis. Here are five things to know about the bill and how it might affect you or your organization:
- Public and private organizations with less than 500 employees can apply for a Paycheck Protection Program loan. The Paycheck Protection Program (PPP) is designed to help employers keep their employees on payroll by providing emergency funds to be used for payroll and operating costs. If employers keep employees on for eight weeks at their pre-crisis compensation level, the loan will be partially or fully forgiven. April 20 marked the end of the first round of funding. As of July 6th, Congress has passed legislation to authorize more funding and the application is open again, with a new application deadline of August 8th, 2020. Organizations should apply as soon as possible, as a large volume of applications is expected. Learn more
- Tax policy changes have been implemented to help businesses. These changes affect 2020 taxes and include an employee retention tax credit for businesses negatively impacted by the pandemic, and the ability to delay the payment of payroll taxes. Learn more
- The CARES Act will provide an additional $200 million in funding for the Emergency Food and Shelter Program (EFSP) to meet the increased need for food and shelter assistance. As the local administrator, United Way of 1000 Lakes will announce information as it becomes available.
- Giving is encouraged through a universal, “above-the-line” deduction for charitable contributions. Taxpayers who don’t itemize can deduct up to $300 in charitable donations from their 2020 income taxes, including gifts to United Way through payroll deduction programs. The CARES Act also encourages taxpayers who itemize and businesses to donate by increasing the limits for charitable giving deductions. Learn more
- The CARES Act expanded eligibility for the Small Business Administration’s Economic Injury Disaster Loans (EIDLs). Small businesses and private nonprofits negatively impacted by coronavirus can apply for loans to help finance paid sick leave for employees, increased costs, and more. Organizations may take out both EIDL and PPP loans, but the funds cannot be used for the same purpose.
To learn more about the CARES Act, watch this webinar on the CARES Act and nonprofits, read about How to Apply for Nonprofit Relief Funds, or view this guide from the U.S. Chamber of Commerce.