COVID-19 Updates and Resources
Scholz Nonprofit Law is tracking issues and opportunities to help nonprofits navigate the COVID-19 crisis. See below for updates and links to resources. Check back often given the pace of change.
SBA Extends Application Deadline for Loans Under Paycheck Protection Program (PPP)
The deadline for small businesses and nonprofits to apply for PPP loans has been extended to Saturday, August 8, 2020. SBA still has $130 Billion to loan, and local lenders are taking applications. Please contact Jeff Femrite at (608) 692-0310 or firstname.lastname@example.org with questions.
REMINDER: Form 990 Deadline of July 15th
All tax-exempt organizations, including 501(c)(3), 501(c)(4) and 501(c)(6) organizations, must file some variation of Form 990 with the IRS. As a reminder, if your organization fails to file Form 990 for three consecutive years, your tax-exempt status will be revoked and your organization will have to reapply for tax-exempt status.
If your organization’s fiscal year is the calendar year, your organization is required to file some version of the Form 990 by July 15, 2020 (which is the extended date because of COVID) or seek an extension.
If your total revenues were $50,000 or less, you may file Form 990-N. Form 990-N, available here, is quick, easy, and requires no financial information, but it is essential for preserving tax-exempt status.
If gross receipts for 2019 are more than $50K but less than $200K (and gross assets are <$500K), your organization may file the Form 990-EZ.
If revenues are over $200K, you must file the full Form 990.
All private foundations must file the Form 990-PF.
Special Note for determining $50,000 threshold: Some organizations may still qualify for Form 990-N even though they exceed $50,000 in total revenues in the immediately preceding tax year.
These organizations include the following:
- in existence for 1 year or less and received $75,000 or less during its first taxable year;
- in existence between 1 and 3 years and averaged $60,000 or less in gross receipts during its first two tax years; or
- at least 3 years old and averaged $50,000 or less in gross receipts for the immediately preceding 3 tax years (including the year for which calculations are being made).
Send questions to Jessica Harrison at email@example.com.
Last day to apply for Paycheck Protection Program Loans (PPP)
June 30, 2020 is the last day organizations and businesses are allowed to apply for Paycheck Protection Program Loans (PPP). Nearly all businesses and organizations are eligible to take advantage of this program. Please contact Jeff Femrite at (608) 692-0310 or firstname.lastname@example.org with questions.
There will be a webinar on Tuesday, June 30, 2020, on the EZ Form for PPP Loan Forgiveness.
New SBA Loan Forgiveness Application and Creation of an EZ Form
SBA revised and streamlined the original PPP Loan Forgiveness Application, reducing its size to 5 pages.
In addition, SBA created a new EZ Loan Forgiveness Application for borrowers that (i) are self-employed, or (ii) did not reduce wages by more than 25%, and did not reduce employee hours, or (iii) experienced reductions in business because of health directives related to COVID-19, and did not reduce wages by more than 25%. If you fail to meet one of the forgoing 3 options, you will need to complete the full PPP Loan Forgiveness Application. You can find it here. Stay tuned for more advice next week.
Return of EIDL Loans
The Small Business Administration has re-opened the EIDL portal. Organizations struggling financially because of COVID-19 should consider applying for EIDL. Organizations can borrow up to $2 million, over 30 years, at 3.75% per annum (2.75% per annum for non-profits). Loan funds can be used for working capital, to pay reasonable business expenses. Up to $10,000 of an EIDL loan is a non-refundable grant (although the grant amount will be offset against PPP loan forgiveness). Please reach out with questions to Jeff Femrite at (608) 692-0310 or email@example.com
Important Update for organizations that received both a PPP loan and an EIDL
With the release of the Loan Forgiveness Application by the SBA, it is now clear that if your organization received both a PPP and an EIDL (regardless of when that EIDL was funded), you are going to need to subtract the EIDL grant amount from the PPP forgiveness. Tune in on Thursday for more details.
Washington Post Reports SBA Slashing EIDL Limit To $150,000
The Washington Post reported this morning (Thursday, May 7, 2020) that SBA’s EIDL program has been so overwhelmed by demand, it has reduced the maximum available loan size from $2,000,000 to $150,000. The report indicated SBA has a backlog of “millions of applications,” and has been “so overwhelmed by demand that it is now allowing only agricultural interests to submit applications.” SBA continues to work thorough existing applications. If the EIDL loan portal opens for non-agriculture organizations, we will post an update here.
Update on EIDL Online Application
The EIDL program (run through the SBA online portal) recently received an additional $60 billion in funding from Congress. At this time, we are aware that the SBA has not re-activated the online EIDL application at SBA.gov. It appears SBA is working through an existing back-log of applications before reopening the application process. We will keep an eye on it and let you know if it opens up.
If you’re still thinking of applying for the Paycheck Protection Program, do not wait. Apply immediately in case the program receives more funding. Here’s an updated PPP checklist.
Wisconsin Work-Share Program
Wisconsin has a short-time compensation program called Wisconsin’s Work-Share Program. A work-share program provides employees with partial unemployment insurance (UI) benefits when their employer has temporarily reduced worker hours. The employees with reduced hours receive a pro-rated UI benefit to offset this reduction in paid wages, implemented by the employer in lieu of laying off workers. For more details read here.
Q&A on Program Details Available
Here is a compilation of frequent questions about the government programs offering financial support to nonprofits, during this COVID crisis. We will update them as we receive new guidance and see issues of concern. Check back often.