Economic Injury Disaster Loan and CARES Act Guidance

Congress has passed several stimulus packages in response to the Coronavirus pandemic.  The most recent is the $2.2 trillion stimulus package, the Coronavirus Aid, Relief and Economic Security (CARES) Act.  Congress also passed a more traditional aid package known as the Economic Injury Disaster Loan program which is a more traditional SBA loan.

What does this mean for associations?

Some of the key items included, and not included, relative to 501(c) organizations. Below are provisions outlined in ASAE’s One-Page Summary.

Section 1102: Emergency Small Business Loans

  • Loans up to $10 million
  • Available to help maintain certain operational costs
  • Employers must maintain all employees through June 30 to be eligible for loans to be forgiven
  • Eligible: small businesses, 501(c)(3)s
  • Issued by private lenders
  • Application deadline is 6.30.20
  • Not Eligible: 501(c)(6)s

Section 1110: Economic Injury Disaster Loans

  • Loans up to $2 million
  • Loan advance up to $10,000 grant
  • Standard requirements for credit have been eliminated
  • 30 year repayment plan
  • Interest rate on loans is 2.75% for nonprofits
  • Eligible: small businesses, 501(c)(3)s, 501(c)(6)s

Section 2205: Charitable Giving Incentive

  • Universal deduction of up to $300 available for cash-only, non-itemized tax filings
  • Eligible: all small businesses and individuals

Section 2301: Employee Retention Payroll Tax Credit

  • Refundable payroll tax credits of up to $5,000/employee
  • Employers must provide proof of 50% reduction in revenue in Q1 2020
  • Eligible: small businesses, 501(c)(3)s, 501(c)(6)s

Section 2302: Delay in Employer Payroll Taxes

  • May defer payroll tax payments over the next two years
  • Eligible: all employers

For more information visit The Center For Association Leadership website.

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