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Harshwal & Company is committed to supporting you through the unprecedented conditions that we are experiencing together. Our ongoing Remote Client Assistance is expanded. Our entire team is working from home. We work as a family and all our team members are working safely from home with no change in pay.

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The CARES Act


U.S. Congress passed and President Trump signed into law the CARES Act (the Coronavirus Aid, Relief, and Economic Security Act) — a significant piece of legislation that seeks to provide approximately $2 trillion worth of economic assistance to consumers and businesses. As per the 800 pages legislations, following are available for Not for Profit Entity:

Funding:


  1. Emergency Small Business Loans (emergency SBA 7(a) loans): Provides funding for special emergency loans of up to $10 million for eligible nonprofits and small businesses, permitting them to cover costs of payroll, operations, and debt service, and provides that the loans be forgiven in whole or in part under certain circumstances.

    • General Eligibility: Available to entities that existed on March 1, 2020 and had paid employees.
    • Nonprofit Eligibility: Available for charitable nonprofits with 500 or fewer employees (counting each individual – full time or part time and not FTEs).
    • Loan Use: Loan funds could be used to make payroll and associated costs, including health insurance premiums, facilities costs, and debt service.
    • Loan Forgiveness: Employers that maintain employment between March 1 and June 30 would be eligible to have their loans forgiven, essentially turning the loan into a grant.

  2. Economic Injury Disaster Loans (EIDL): Eliminates creditworthiness requirements and appropriates an additional $10 billion to the EIDL program so that eligible nonprofits can get checks up to $10,000.


Tax and other benefits:


  1. Charitable Giving Incentive: Includes a new above-the-line deduction (universal or non-itemizer deduction that applies to all taxpayers) for total charitable contributions of up to $300. The incentive applies to contributions made in 2020 and would be claimed on tax forms next year. The bill also lifts the existing cap on annual contributions for those who itemize, raising it from 60 percent of adjusted gross income to 100 percent.

  2. Self-Funded Nonprofits and Unemployment: Only reimburses self-funded nonprofits for half of the costs of benefits provided to their laid-off employees.

  3. Employee Retention Payroll Tax Credit: Creates a refundable payroll tax credit of up to $5,000 for each employee on the payroll when certain conditions are met. The entity had to be an ongoing concern at the beginning of 2020 and had seen a drop in revenue of at least 50 percent in the first quarter compared to the first quarter of 2019. The availability of the credit would continue each quarter until the organization’s revenue exceeds 80 percent of the same quarter in 2019. For tax-exempt organizations, the entity’s whole operations must be taken into account when determining the decline in revenues. Notably, employers receiving emergency SBA 7(a) loans would not be eligible for these credits.

Other Significant Provisions


  • Direct Payments to adults of $1,200 or less and $500 per child ($3,400 for a family of four) to be sent out in weeks. The amount of the payments phases out based on earnings of between $75,000 and $99,000.

  • Expanded Unemployment Insurance:Increases payments by $600 per week for four months on top of what state unemployment programs pay.

  • Amendments to the New Paid Leave Mandates: Lowers the amounts that employers must pay for paid sick and family leave under the Families First Coronavirus Response Act* (enacted March 19) to the amounts covered by the refundable payroll tax credit.


The federal government is currently finalizing the details and protocols about how and when different programs and relief will be implemented. Harshwal & Company is closely monitoring these updating guidelines and will make the most updated and accurate information available to our clients.

How We Can Help


Although details are still being finalized, one can prepare and gather resources to apply quickly when it becomes available. There will be limited time to do standard procurement procedures. It is prudent to have the expertise on your side to apply and respond in this new and changing environment.

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