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2020 CARES ActHow It Can Impact Your Church
Your Host
Josh HenryChief SimplifierSimplifyChurch.com
Today's Agenda
Coronavirus Aid, Relief and Economic Security Act (CARES Act) H.R. 748
How It Will Impact Your Church Members and Attenders
How it may Impact Your Church
Basic FAQ's
Disclaimer: The information presented is provided as general guidance and is believed to be accurate at the time of the presentation. Consider seeking additional advice and counsel from your legal, tax, lending and other competent professionals.
Simplifying Business So You Can Focus on Ministry.
Bookkeeping and AccountingPayrollOnline GivingMuch More...
Impact on Individuals In Your Church
Cash Payments
Individuals in the US in good standing with the IRS will automatically receive a Cash Payment
• $1,200 per Person• $500 per Dependent Child• $3,000 Maximum per Family
Cash Payments - Limits
• Individual Filers - $75,000• Phased out between $75,000 - $99,000
• Married Filers - $150,000• Phased out between $150,000 - $198,000
Cash Payments – What Does This Mean For You
Your church is looking for leadership during this time. By knowing the basics, you can help to point people in the right direction.Financial Stewardship is an area of discipleship you can speak into.
Individual Impact - Extended
Unemployment Insurance
• Extra $600/week added to benefits• 13-week extension of benefits• Now includes gig workers and freelancers• Church employees are eligible for 50% of benefits
Individual Impact - Extended
Other Items
• Tax filing deadline extended to July 15, 2020
• Federal Student Loans payments and interest delayed until Sept. 30
Impact on Your Church
Church Impact
SBA.gov
Loan requests should start April 3, 2020 from your SBA Approved Lender.
Sample loan app is available at the website:
https://www.sba.gov/funding-programs/loans/paycheck-protection-program-ppp
Church Impact
Paycheck Protection Loans
• Small Businesses and Organizations are Eligible (Churches)
• Eligible for loans to cover payroll and some associated costs
• Broadly defined as salaries, wages, or similar compensation, certain benefits and other expenses to include both FT & PT Employees and some Contractors
Church Impact
Paycheck Protection Loans - specifics
• No more than 500 employees• May not exceed $10 Million• Must be used within 8 weeks of deposit to pay for eligible payroll expenses• Will not require personal guarantees• Will not require collateral• Will have minimal, if any, processing fees• May be eligible for forgiveness under terms provided• Red tape for SBA Loans has been drastically reduced
Church Impact
Paycheck Protection Loans - specifics
• Loans will be applied for through local banks – paid by SBA• Loan funds will be deposited "quickly"• Funds are to be used over the following 8 weeks from deposited
Church Impact
Paycheck Protection Loans - considerations
Remember the intent of these loans.
They are intended to keep your employees working and paid, not cover all your business expenses
Church Impact
Paycheck Protection Loans – How Much To Request?
The loans are to cover 2.5 times your previous 12 months average payroll expenses.
Example:
Average Payroll = $20,000
Loan Amount Request = $50,000
$20,000 x 2.5 = $50,000
Church Impact
Paycheck Protection Loans – Documents Required?
2019 Quarterly 941'sPayroll Reports for 12-Month Period (ending most recent payroll date)1099s for Independent ContractorsDocuments showing all Health Insurance PremiumsDocument the sum of all retirement plan funding that was paid by company
Church Impact
Paycheck Protection Loans – Payroll Expenses?
Payroll Costs may be considered as:• Wages, Commissions, Salary or similar compensation to an employee or Independent Contractor• Payments of cash tips or equivalent• Payment for Vacation, Parental, Family, Medical or Sick Leave – If not already on previous stimulus• Allowance for dismissal or separation• Payment for group health insurance including premiums• Payment of retirement benefits and matches
Church Impact
Paycheck Protection Loans – Terms
No payments for up to 1 yearInterest rate will not exceed 4%No interest for 6 months- One-time extension request for additional 6 months
Loan term will be up to 10 years
Church Impact
Paycheck Protection Loans - FORGIVENESS
All or part of the loan may be eligible for forgiveness so long as certain criteria are followed:
1. The funds are used to cover payroll expenses during the 8-week period
2. You did not reduce your workforce during the 8-week period
3. You did not reduce anyone's compensation amount by more than 25%
Church Impact
Paycheck Protection Loans - FORGIVENESS
Partial Forgiveness:
There are stipulations provided to provide some forgiveness based on the number of FTEE (Full Time Equivalent Employees) during the time period.
Example:10 Employees reduced to 9 during period = 90% of the loan eligible for forgiveness
Church Impact
Paycheck Protection Loans - FORGIVENESS
After 8 weeks, you may apply for forgiveness from lender
• Documentation verifying number of employees and rates• Cancelled checks showing other qualified expenses
You must apply for Loan Forgiveness!
Church Impact
Call To Action
1. Contact Your Local Bank or SBA Lender2. Find your numbers3. Stay tuned for updates
Church Impact
Basic FAQ's
What banks are participating?How do we request funds?How long will it take to receive funds?Are churches eligible?How do we prove employee numbers?What is the timeframe?Are there other stipulations or terms of the loans/grant?
