cares act benefits for nonprofit caas
introduction cares act ppp eidl main street payroll tax relief considerations for caas

CARES Act Benefits for Nonprofit CAAs Introduction*

The Coronavirus Aid, Relief and Economic Security Act (the CARES Act), which was signed into law on March 27, 2020, offers various forms of aid to nonprofit Community Action Agencies (CAAs) and state associations whose operations have been impacted by the COVID-19 outbreak:

  1. Paycheck Protection Program (PPP) loans, available only to 501(c)(3) tax-exempt organizations with fewer than 500 employees and fully forgivable if spent for qualifying purposes, including payroll costs, mortgage interest, rent, and utilities (update: the window to apply for PPP loans expired on August 8, 2020); and

  2. Economic Injury Disaster Loans (EIDL), available to all tax-exempt nonprofit organizations to cover payroll costs, rent, and mortgage, and which are not forgivable, but applicants may receive an advance of up to $10,000 that does not have to be repaid (update: all available funds for the EIDL advance program have been allocated, so advances are no longer available);

  3. Main Street Lending Program, non-forgivable loans available to 501(c)(3) tax-exempt organizations with between 10 and 15,000 employees that agree to make certain covenants, including to make reasonable efforts to maintain their payroll and retain employees during the time when the loan is outstanding; and

  4. An Employee Retention Tax Credit and a deferral of 2020 payroll taxes for certain tax-exempt employers.

 

*Updated October 15, 2020

This resource is part of the Community Services Block Grant (CSBG) Legal Training and Technical Assistance (T/TA) Center. It was created by Community Action Program Legal Services, Inc. (CAPLAW) in the performance of the U.S. Department of Health and Human Services, Administration for Children and Families, Office of Community Services Cooperative Agreement – Grant Award Number 90ET0467-03. Any opinion, findings, conclusions, or recommendations expressed in these materials are those of the author(s) and do not necessarily reflect the views of the U.S. Department of Health and Human Services, Administration for Children and Families.