Dear clients, friends and Madison nonprofit community:
We continue to think of you and focus our efforts on digesting the ever-changing news during this difficult time.
To be more mindful of everyone’s limited time and effective in our efforts to help nonprofits, we are scaling back our posts through this channel to a (mostly) weekly format to highlight new developments from the week. We will highlight the resources and articles added to our website throughout the week with links to the fuller content. Additionally, we will use this channel to announce urgent news as it is available. This week, this article serves both purposes.
For this week, the most significant news:
PPP Loan money exhausted:
Funding for the $350 million small-business payroll protection program available to 501c3s ran out of money yesterday, April 16. There is talk in Congress about replenishing this account, but no action yet. For now, new loans are on hold and organizations cannot count on this resource at this time.
Other Options for Nonprofits:
Employee Retention Payroll Tax Credit – All employers, regardless of size, may be eligible for a refundable payroll tax credit of up to $5,000 for each employee on the payroll.
To be eligible, a nonprofit employer who is experiencing either:
- Fully or partially suspended operations as a result of a government authority limiting commerce, travel or group meetings; OR
- A greater than 50% reduction in quarterly revenue when measured against the employers’ same quarter in 2019.
The credit applies to wages and benefits between 3/13/20 and 12/31/20. The maximum credit is 50% of $10,000 per employee (maximum relief is $5,000 per employee).
Employers will receive this credit through their Federal Form 941, beginning with 2nd quarter filings (even for eligible Q1 credits) by claiming their amount against the employer portion of employment taxes (including SS). If credit exceeds employer portion of taxes due, the employer may report this on Form 7200 to receive a refund for this additional amount. NOTE: this credit is not available to Employers receiving a Paycheck Protection Program loan.
For more information see IRS FAQs about the ERTC.
Join us for an informational webinar next week Tuesday:
Scholz Nonprofit Law will host another webinar Tuesday, April 21 at 10 am with updates on these and other issues.
Please join us for an hour on Tuesday where our knowledgeable staff will deliver up-to-date strategies and options for nonprofits during this time, answer participant questions, and allow for the helpful exchange of information among peer organizations. To sign up for this webinar, please register and ask optional questions in advance here.
Highlights from earlier this week:
Monday’s post highlighted an underreported, but key alternative option to a PPP loan: The Wisconsin Work-Share Program. On Wednesday, the Wisconsin Legislature addressed this program in Act 185 and simplified the application process and removed constraints from employers including reducing the minimum employees from 20 to 2.
Learn more about this Program and how to apply for it on our Tuesday webinar.
Tuesday’s post drew attention to the recently added incentives to donors (individuals and corporations) to give to nonprofits.
After this weekend, we will have added our own FAQs page to our website using real questions from nonprofits in the community and our team’s responses to help clear up common misconceptions and advise on how this pandemic relief is available to nonprofits.
If you are looking for more information, please see our webinar from last week. As things are moving so fast, there are some updates to this 10-day old video, but the basic information about the CARES Act and its impact on nonprofits is helpful navigating in these times.
And, as always, for previous articles and stay tuned during the week ahead we will keep updating the Scholz Nonprofit Law blog.
Thank you to everyone who is out there, whether you are feeling hopeful or uncertain, we recognize your hard work and commitment and know that we will all get through this together.
Melissa and the Scholz Nonprofit Law team