On Sunday, December 27, President Trump signed a new stimulus bill to help support millions of Americans as they continue to struggle with the impact of COVID-19 on their health, livelihood, and community. Forefront and our coalition partners have continued to advocate for specific relief of the nonprofit sector. Although not all we pushed for is in this package, we will continue to speak on behalf of all nonprofits in the next stimulus package scheduled to be discussed after January 20, 2021 when President-elect Biden is sworn in. For now, here are the key issues this bill addresses for our sector:

• • Direct Payments of $600 for individuals making less than $75,000 & $1,200 for married couples making less than $150,000, plus $600 per dependent.

• • Coronavirus Relief Fund: Extended to 12/31/2021.

• • Relief for Reimbursing Employers: Extends until 3/14/2021 the 50% federal coverage of the costs of self-insured “reimbursable” employers.

• • Charitable Giving Incentives: Reestablishes the $300 above-the-line deduction for 2021 and applies a $600 deduction for couples filing jointly in 2021; imposes a penalty for overstating contributions. The bill also extends for one year the increased limits on deductible charitable contributions for individuals who itemize and for corporations.

• • PPP Reforms
    • Forgiveness: Expands forgivable expenses to include the costs of PPE, workplace modifications; short-form approval of loans of $150,000 or less.
    • Second Draw Loans: Charitable nonprofits may qualify for an additional PPP loan (Second Draw) of up to $2 million if they a) employ 300 or fewer employees, and b) experience a decline in gross receipts of 25% in one of the four quarters in 2020 compared to the same quarter in 2019.
      NOTE: Nonprofit “gross receipt” defined using tax-law definition and not the arbitrary definition seen in earlier drafts.

• • Economic Injury Disaster Loan Grants: Provides $20 billion for additional $10,000 grants; repeals deduction of EIDL grants from the amount of loan forgiveness.

• • Save Our Stages: $15 billion dedicated to aid performance venues, independent movie theaters, and cultural institutions.

• • Employee Retention Tax Credit: Extends for six months (to 7/1/2021) and expands usefulness, particularly to nonprofits excluded from Paycheck Protection Program (PPP) participation, by reducing required decline in gross receipts from 50% to 20%, increasing the refundable payroll tax credit from 50% to 70%, and covering up to two quarters for a total benefit of $14,000 per covered employee. It also provides that employers who receive PPP loans may still qualify for the ERTC with respect to wages that are not paid for with forgiven PPP proceeds.

• Paid Sick Leave Tax Credit: Extends through 3/31/2021 the refundable payroll tax credits for paid sick and family leave that were established in the Families First Coronavirus Response Act. The bill also extends through 2025 the 12.5% to 25% income tax credit for paid family and medical leave originally enacted in the 2017 tax law.

Special thanks to the National Council of Nonprofits for this analysis.