In this alert we have several important updates to share with you about the Paycheck Protection Program (PPP), Shuttered Venue Operators Grants (SVOG), Economic Injury Disaster Loans (EIDL), and the Employee Retention Credit (ERC). Related to the pandemic, we also have a new announcement to share from one of the charity watchdog organizations.
What You Need to Know
- The deadline to apply for a Paycheck Protection Program (PPP) loan has been extended to May 31, 2021.
- The Shuttered Venue Operators Grant (SVOG) application portal opened April 8 and with it, the Small Business Administration (SBA) released more information for applicants. As part of the application process, the SBA requires that an applicant provide permission for the SBA to access its tax records directly from the IRS. The SBA will provide the form necessary to request this permission. Access our Staying Afloat Arts & Culture Series blogs and videos centered around the SVOG.
- The SBA has increased the Economic Injury Disaster Loans (EIDL) limit from $150K to $500K, beginning with loans approved the week of April 6. For loans approved prior to the week of April 6, the SBA will reach out to existing borrowers with details on how to request a loan increase (if eligible).
- In addition to the guidance already issued, the IRS has released new guidance on claiming the Employee Retention Credit for the first two quarters of 2021. This guidance includes instructions for eligible small employers on how to apply for an ERC advance. The IRS has yet to release guidance on claiming the ERC for the last two quarters of 2021.
- Nonprofits who have a current rating on Charity Navigator will be provided an opportunity to provide data on how they were impacted by the pandemic, and Charity Navigator has pledged not to change ratings for charities negatively impacted by the pandemic.
Paycheck Protection Program (PPP)
- Program deadline extension – the PPP Extension Act of 2021 was signed into law by President Biden on March 30, 2021. This act extends the deadline to apply for a PPP loan from March 31 to May 31, 2021 but doesn’t provide any additional funding for the current round of the program.
- Updated borrower applications – the SBA released new versions of the first draw and second draw applications and loan FAQ which reflect the newly eligible nonprofit categories and size standards amended under the American Rescue Plan Act (ARPA). As a reminder, the ARPA expanded eligibility to most nonprofits except 501(c)(4) entities.
- Payroll cost exclusions – the SBA released clarifying guidance that payroll costs ineligible for loan forgiveness include payroll costs used to claim an Employee Retention Credit, a disaster credit, and premiums for COBRA continuation coverage.
Shuttered Venue Operators Grant (SVOG)
- Application portal opens April 8 – applications will be processed first for those organizations that have suffered the greatest economic losses and will be reviewed for each priority group in the order they are received. The SBA is expected to soon release an Applicant User Guide to accompany the SVOG application portal.
- SBA Form 4506-T – the SBA will be releasing a modified version of this IRS form for SVOG applicants. The form allows access of an entity’s tax return(s) to by the SBA. Look for the SBA’s version on the application portal.
- Submit for PPP first – remember, entities are ineligible to receive PPP loans after receiving an SVO grant. In addition, any PPP loan proceeds received after December 27, 2020 – but before an SVO grant is issued – will be subtracted from a recipient’s SVOG award. SVOG recipients that received PPP loans prior to December 27, 2020 do not have to subtract PPP loan proceeds from their SVOG.
- SBA guidance – SBA continues to release resources and video tutorials, so we recommend checking in frequently to the SBA’s SVOG website for the latest information.
- YPTC Arts & Culture series – for more helpful tips, be sure to check out the latest installments in our new arts and culture webinar series .
Economic Injury Disaster Loan (EIDL)
- Loan limit increase – the SBA has increased the maximum EIDL loan amount from $150k to $500k and extended the economic injury period used to calculate loan amounts from 6 months to 24 months to recognize the extended length of the pandemic.
- Extended deferral – the deferment period for all loans is being extended into 2022.
- Timing – the new rules are automatically in effect for borrowers approved after April 6, 2021. The SBA will reach out to existing borrowers with details on how to request a loan increase (if eligible). For more information on the program, applicants can visit the EIDL website.
Employee Retention Credit (ERC)
- Guidance for first two calendar quarters of 2021
- What it covers – the IRS guidance incorporates the amendments enacted as part of the Taxpayer Certainty and Disaster Tax Relief Act of 2020 (Relief Act) such as the increased credit amount, expanded eligibility, modifications to the gross receipts test, and allowable wages for which a credit can be claimed. The new guidance also provides instructions for eligible small employers on how to apply for an ERC advance. Note: this guidance applies only to the first and second calendar quarters of 2021.
- Alternative quarter election – as a reminder, when determining whether an employer meets the decline in revenue required for the 2021 credit, an employer may elect to compare gross receipts for the immediately preceding calendar quarter in 2021 with those for the corresponding calendar quarter in 2019. The guidance provides examples of how this election may work.
- More guidance to come – the IRS has yet to release guidance on claiming the ERC for the last two quarters of 2021.
- Charity Navigator updates
- Ratings update – Charity Navigator has pledged not to change ratings for charities negatively impacted by the pandemic. All rated charities will be provided an opportunity to submit narrative information detailing the effects of the COVID-19 pandemic on their nonprofit, and how they innovated and adapted to fulfill community needs related to their mission. Charity Navigator will communicate more in the coming months.
- New! Volunteer website – Charity Navigator has partnered with a volunteer-management software company to provide nonprofits access to post volunteer opportunities. Volunteers can sign-up and search for opportunities by location directly from Charity Navigator’s volunteer site.
- YPTC webinar – for more tips – like the ones above – be sure to view our new webinar on improving your nonprofit’s charity ratings.
YPTC is here to help
Reach out to your YPTC staff member, and access our Staying Afloat Resources web page for helpful links and resources, including our recent Q&A blog posts and the latest installments in our Arts & Culture series.