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, aconsisting of First Draw (available to nonprofits with fewer than 500 employees) and Second Draw (available to nonprofits with fewer than 300 employees), both of which are fully forgivable if spent for qualifying purposes, including payroll costs, mortgage interest, rent, and utilities.

  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. When the program first started, certain applicants were eligible for advances of up to $10,000 that did not have to be repaid, but all available funds for the EIDL advance program have been allocated and thus 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. The Main Street Lending Program was terminated on January 8, 2021.

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

 

***Updated April 23, 2021

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.