Grants, Loans, and Tax Credits Available to Nonprofits

Blog
April 1, 2020

Federal, state, and local governments have taken steps in the past days and weeks to curb the economic impact of the coronavirus outbreak (COVID-19). As a result, many nonprofit organizations now have access to a variety of economic relief programs. Below is a summarized list of grants, loans, and tax credits for which D.C, Maryland, and Virginia nonprofits could be eligible.

Grants

  • Maryland Small Business COVID-19 Emergency Relief Grant Fund
    • Up to $10,000 in grants available (not to exceed 3 months of cash operating expenses)
    • Must have fewer than 50 employees and be headquartered in Maryland
    • No more than $5M in revenue

Learn more and apply for a grant from the Maryland Small Business COVID-19 Emergency Relief Fund.

Loans

  • SBA Economic Injury and Disaster Loan (EIDL)
    • Available to nonprofits with up to 500 employees (NOTE: Based on the sources we have found, all nonprofits are eligible. We will update as more information becomes available.)
    • Loans of up to $2M to eligible nonprofits
    • Eligible nonprofits may be able to receive a $10,000 grant within three days of application

Find a lender participating in the SBA loan program please visit the PPP website.. To determine what information is required to apply for an SBA loan, please use the checklist. You may also review the Economic Injury and Disaster Loan application.

  • SBA Payroll Protection Program Loans (PPP)
    • Available to 501(c)3 and 501(c)19 organizations with up to 500 employees
    • Loans of up to the lessor of 2.5 times average monthly payroll for the year prior to the date of application or $10M
    • May be eligible for up to 8 weeks of loan forgiveness for qualifying costs incurred and payments made during the 8 weeks beginning on the loan origination date. (not to exceed the principal amount of the loan).
      • Must be made for qualifying costs
      • Evidence of qualifying costs and payments must be submitted to the lender
      • Loan amounts not forgiven will carry forward as a loan for up to 10 years

Note that the organization will need to apply for the loan forgiveness and the regulators have 30 days to issue regulation and guidance relating to forgiveness from the date of the passage of the bill.

To learn more about the Payroll Protection Program, please review the borrowers information sheet. You may also review the Payroll Protection Program application form.

Tax Credits and Tax Deferrals

  • Emergency Paid Sick Leave Credit
    • Available to employers with employees who have taken sick leave as a result of the coronavirus
    • Credit is limited to 10 days and based on the qualifying situation of the employee
  • Family Medical Leave Credit
    • Allows payment at two-thirds of regular pay to qualifying employee at a rate of up to $200 for up to 10 weeks
    • Requires employee to have been employed at least 30 days prior to qualifying event
  • View our blog post, “ABCs to account for COVID-19 Sick Leave,” for useful information on how to track the tax credits available, as well as how to setup your accounting system and track the tax credits related to COVID-19 sick leave.
  • Payroll tax credits will be claimed by initially by submitting Form 941 and withholding payment of the credit amount from the federal employment taxes, including withheld taxes, that are required to be deposited with the IRS or by requesting an advance from the IRS.
    • Refunds for credits in excess of the employer portion of social security tax will be shown as an overpayment on the Form 941 and can be refunded less any other tax liabilities owed.
  • Employee retention payroll tax credits are available to nonprofits that do not receive SBA Payroll Protection Program loans.
    • Refundable payroll tax credit of up to $5,000 is available for each employee on the payroll when certain conditions are met.
    • For employers with more than 100 employees, the credit is only available for employees who are not providing services due to COVID-19.
    • For employers with fewer than 100 employees, the credit is available for all employee wages paid.
  • Employer share of FICA taxes due through December 31, 2020 can be deferred and payable over two year.
    • 50% is due by December 31, 2021.
    • The remaining 50% is due by December 31, 2022.
    • Deferral is not available to employers that use SBA 7(a) loans designated for payroll or loans issued through the Payroll Protection Program.

Aronson’s dedicated nonprofit industry team is immediately available if you have any questions or would like to discuss your options in more detail. For questions or more information, please contact Eric Hittle and 301.231.6200.