The latest bill that just passed congress has a VERY GOOD NEWS for churches and nonprofits.
It affects your congregation. And, instead of the normal intro material in articles – let’s get to the facts.
Every citizen will receive the following:
- $1200 per person + $500/child under 17 with a maximum disbursement of $3,000 per family.
- no application necessary – showing up in mail
- Max income of $75K per individual with a gradual phase-out up to$ 99K
- Couples with income up to $150K before phase-out up to $198K
- Individuals with incomes of $100K or greater do not qualify.
Here are the details how it affects your church or ministry nonprofit:
- Financing is distributed in the forms of forgivable loans known as Paycheck Protection Loans.
- Loans are available for organizations with 500 or few employees – including Full Time, Part Time, and contractors (1099-Misc).
- Fully guaranteed by the federal government
- SBA (Small Business Administration) administered through your local bank (becoming avail on Friday, April 3). This means you can simply call your local banker, with whom you have a relationship, to begin the process.
- Loans are available up to $10M per organization
- Maximum available is calculated as 2.5X payroll (up to $10M)
- Waives SBA requirements re: collateral
- Includes payments for group healthcare including premiums and retirement accounts.
- To get your loans forgiven you must
- For some a portion or whole can be forgiven from the government, making it a grant.
- Forgiveness can be in the amount of the 8-week period from the beginning date of the loan. Submit documentation showing the number of employees during the 8 weeks, and this is important – you MUST seek forgiveness by completing the necessary paperwork with the lending institution.
- Additional $300 deducted “above the line” on AGI for all citizens. This means that everyone who files taxes for 2020 tax year will receive an additional amount of $300 that can be deducted on their tax filing regardless if they itemize or take the standard deductions. As an example: The Smith family receives their full allotment of $3,000 in the mail from the federal government. Their tithe of $300 they can still take as a full deduction regardless of anything else they contribute the rest of the year.)
For members who itemize their deductions:
- Cash contribution can be deducted up to 100% of AGI in 2020. This is big because they are normally limited to 60% deductible values.
- Excess contributions can be carried up over the next 5 yrs
- corporate donors will be able to deduct contributions totaling 25% of AGI (normally 10%).
For more information with resources on how this act affects your church, including a calculator to determine how much your ministry qualifies to receive, CLICK HERE.
You can read a great bullet-listed primer put together by our friends at INJOY Stewardship Solutions and Church Fuel. If you have questions please do not hesitate to reach out.
The U.S. Chamber of Commerce put together a preliminary checklist as well. You can find that document here.