Jan. 13, 2021 — On Dec. 27, 2020, the Economic Aid Act was signed into law and reopens the Paycheck Protection Program (PPP) for first time PPP loans as well as authorizing second PPP loans through May 31, 2021. First-time loans do not need to show a 25% reduction in income to apply. To receive a second disbursement of PPP, the entity must show a 25% loss in any quarter of 2020 as compared to the same quarter in 2019. The Paycheck Protection Program (PPP) is designed to assist employers in retaining as many employees as possible during this public health emergency. Foursquare Charter, District, and Covenant churches, schools and daycares are eligible. This loan is forgivable up to 100%.

 


 

Aug. 14, 2020 — In light of COVID-19 reaching pandemic levels, the U.S. government has made various forms of aid and economic stimulus available to employers through the CARES Act. However, many of these forms of aid overlap, are mutually exclusive, or have specific limitations and applicability within the ministry context. This guide outlines the most relevant forms of aid for religious employers along with the advantages, disadvantages, exclusions and critical disclaimers for each program.

ICFG Board Authorization to Apply for Cares Act Loans

CRITICAL THINGS TO KNOW ABOUT THE PAYCHECK PROTECTION PROGRAM

  1. Two PPP loans are available: a) First Draw Loans are available for churches that have not applied previously or received but returned funds. b) Second Draw Loans are available for churches that received a first draw PPP loan and have spent all the funds, even if they have not yet applied for loan forgiveness.
  2. Loans are available to churches and other religious nonprofits and do not require forfeiture of religious liberties
  3. Borrowers must certify that the uncertainty of current economic conditions makes necessary the loan request to support the ongoing operations of the borrower.
  4. This program limits compensation included in the amount eligible for a PPP loan to $100,000 per employee (not including benefits like health insurance)
  5. It is possible to have 100% of the loan forgiven if the money is used within the prescribed guidelines
  6. Independent contractors (i.e. anyone receiving a 1099) may not be included in the ministry’s PPP loan application and will be required to apply separately as a sole proprietor
  7. Foursquare has a helpful PPP resource that includes FAQs and application instructions

CRITICAL THINGS TO KNOW ABOUT THE ECONOMIC INJURY DISASTER LOANS

  1. No collateral required for loans of $25,000 or less, but for loans of $25,000 or more, general security interest in business assets will be used for collateral instead of real estate.
  2. ICFG board approvals are required for loan applications over $25,000. Start by contacting your district office.
  3. Loans over $200,000 require a personal guarantee.
  4. Repayment terms are 2.75% over 30 years.
  5. This may be a good option for ministries that do not have paid employees because the money can be used to cover facility obligations.
  6. Detailed information about this program is outlined in our FAQ document

CRITICAL THINGS TO KNOW ABOUT THE EMPLOYER PAYROLL TAX DEFERRAL (Mar. 2020)

  1. Ministries that receive PPP loans are not eligible for this program
  2. This is simply a deferral of the employer’s share of social security taxes (6.2% of non-minister wages) through December 31, 2020
  3. Half of the deferred payments are due December 31, 2021, and the second half by December 31, 2022
  4. This can be risky if the taxes cannot be paid on time since there is no forgiveness of this obligation
  5. Detailed information about this program is outlined in our FAQ document

CRITICAL THINGS TO KNOW ABOUT THE PRESIDENTIAL MEMORANDUM ON PAYROLL TAX DEFERRAL (Aug. 2020)

  1. The employer has the discretion to allow employees who make less than $4,000 per bi-weekly pay period to forgo the employee withholding of social security tax (6.2%) from September 1, 2020 to December 31, 2020.
  2. This is only a deferral of taxes and must be repaid
  3. The repayment is made by doubling the employees social security deduction from January to April of 2021.
  4. Employers are not required to participate, they may choose not to offer this to employees.
  5. Employees do not have to participate if the program is offered
  6. Employers must repay the funds even if the employee terminates employment.
  7. Interest and Penalties apply if the amount is not repaid by May 1, 2021.
  8. Detailed information about this memorandum is outlined here.

CRITICAL THINGS TO KNOW ABOUT THE CARES ACT UNEMPLOYMENT BENEFITS

  1. Employees who have not paid into unemployment may still be eligible for this program
  2. Detailed information about this program is outlined in our FAQ document

Visit the Cares Act Paycheck Protection Program resource for more information at foursquare.tools.

visit foursquare.tools
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