Tag Archive: nonprofit

1. $900 Billion in Pandemic Relief Signed Into Law

   December 23, 2020 10:46 am Leave a Comment

   

    

   Businesses, individuals benefit from provisions designed to keep the American economy afloat as uncertainty related to COVID19 continues. 

    

   After months of negotiations, Congress passed an appropriations bill for 2021 that includes $900 billion in relief that could assist businesses and individuals facing economic challenges related to the COVID19 pandemic. In part, the legislation augments the CARES Act passed earlier this year. President Trump signed the bill into law on Sunday, December 27, 2020.

   Kruggel Lawton CPAs is monitoring the tax implications of the bill closely and will provide expert analysis and assistance for our clients in the coming weeks as we learn more information.

   There are several key provisions and tax advantages that business owners and nonprofits will want to know. Kruggel Lawton will be offering a series of webinars designed to keep our clients informed. Be sure to look for communications and invitations to these online education sessions.

    

   Here is some of what we know now about what is included in the Consolidated Appropriations Act, 2021:

    

   For Individuals

   • There will be a $300 per week supplemental job loss benefit from December through at least March 14. This benefit will be available in addition to standard unemployment benefits.
   • Individuals earning under $99,000 will receive up to $600 as a direct stimulus payment; married couples earning under $150,000 could receive up to $1,200. Families will receive $600 per child, but it does not include adult dependents.
   • Renters making less than $99K annually who are facing eviction could have the current “Eviction Moratorium” extended through January 31. $25 billion is provided in emergency assistance to renters who lost their income due to COVID19.
   • Americans receiving Supplemental Nutrition Assistance Program (SNAP) will have a temporary increase in benefits by 15% through June 2021.
   • An extension of federal student loan forbearance was not included in this bill, however the U.S Department of Education had previously extended the time period for federal student loan repayment suspension and 0% interest rate through January 31, 2021. This applies to payments on federal student loans owned by the Department of Education.

    

   For Businesses and Nonprofits

   • Businesses who received Paycheck Protection Program (PPP) Loans forgiven will be allowed to deduct the costs covered by those loans on federal tax returns. The COVID-19 relief bill clarifies that “no deduction shall be denied, no tax attribute shall be reduced, and no basis increase shall be denied, by reason of the exclusion from gross income provided” by Section 1106 of the CARES Act.
   • An additional $284 billion will be added to the Paycheck Protection Program (PPP), re-opening for a second major round of applications after closing in August. These loans will be reserved for businesses with fewer than 300 employees that have experienced a 25% drop in revenue in any of the first three quarters of 2020 compared to the same quarter from 2019. The fourth quarter of 2020 compared to the fourth quarter of 2019 will also county for qualification, as long as the loan application is submitted after January 1, 2021.  The loans will be capped at $2 million.
   • The legislation simplifies the process for PPP borrowers who have loans under $150,000. The borrower will simply need to complete a one-page form, including basic information on their finances and employment rates to receive forgiveness. 
   • The PPP will be modified to include faith-based organizations, TV and radio news outlets, 501(c)6 nonprofits like chambers of commerce and visitors bureaus. $15 billion is earmarked for arts and entertainment institutions like stage theatres, museums, and other live venues and those who have faced 90% revenue losses will receive first priority funding. $12 billion is specifically earmarked for businesses operating in low-income and minority communities and an additional $20 billion is designated for extending the Economic Injury Disaster Loans grants program for businesses in low-income and minority communities.
   • Employers who deferred their workers’ payroll taxes will now have until the end of 2021 to increase the withholding to pay back the taxes owed, instead of April.
   • In an attempt to revive and support the restaurant industry, there will be a tax break for business meal expenses. Businesses will be able to deduct 100% of their business meals instead of 50% from January 1, 2021 through December 31, 2022.
   • This legislation does not provide protection for businesses against litigation regarding COVID19 exposure.

    

   For State and Local Government

   • There is no new funding made available in this legislation specifically for state and local governments.
   • There is, however, $22 billion in funding for health-related expenses incurred by State, Local, Tribal, and Government territories.
   • $7 billion was provided to expand broadband.

    

    

   Thank you for your patience and trust in Kruggel Lawton during these unusual circumstances. We will be monitoring ongoing developments, re-evaluating, and keeping you informed of changes. Please contact us if you have questions, concerns, or would like more information and help concerning your PPP Loan.

    

2. Nonprofit Guide to the CARES Act and FFCRA

   April 1, 2020 1:05 pm Leave a Comment

   Much has been written about how the CARES Act and Families First Coronavirus Response Act (FFCRA) will help businesses. Nonprofit organizations are included in those relief efforts. We've shared some high level insights into how nonprofits can benefit.

   CARES Act

   1. Delay of payroll tax remittance
   2. Employee retention credit
   3. Paycheck Protection Program (PPP)
   4. Economic Injury Disaster Loans (EIDL)
   5. Benefits for individuals

   FFCRA

   6. Employee paid sick leave and FMLA

    

   DELAY OF PAYROLL TAX REMITTANCE

   1. Applies to the employer’s 6.2% portion of the Social Security tax due from 3/28/20 to 12/31/20
      -50% payable by December 31, 2021
      -Remaining 50% payable by December 31, 2022

   Note: deferred payroll tax payments not permitted if the organization has received debt forgiveness on an SBA loan (PPP loan)

   EMPLOYEE RETENTION CREDIT

   1. Applies when an organization has been partially or fully shutdown or with a 50% decrease in gross receipts in a quarter compared to prior year.
      -For the gross receipts factor, applies until the organization returns to 80% of prior year
   2. Must apply to all aspects of nonprofit organization
   3. Introduces a 50% refundable tax credit for 50% of the wages (including employer’s health plan expenses) paid by the employer up to $10,000 per employee (max $5,000 per employee)
      - If an employer has > 100 employees, it applies to the employees not providing services
      - If an employer has < 100 employees, applies to all employees paid during the eligible period
   4. Organization not eligible if receive a PPP loan
   5. Provides for advance payment of the credit

   PAYCHECK PROTECTION PROGRAM

   NOTE: Some of this information may change as regulations are finalized and implemented. We will update as new details become available.

   1. Applies to 501(c)(3) organizations, not to 501(c)(6) organizations
      -No apparent exclusion of faith-based organizations (including churches)
   2. For organizations with < 500 employees
      -1 person = 1 employee for purposes of the 500 test
   3. Loan
      -Amount = lesser of 2.5 months of average payroll (including health benefits) or $10,000,000
      -Made by local and national SBA lenders, all FDIC-insured institutions
      -Relaxed requirements
      -Convert to grants equal to the amount spent on payroll, rent, interest on mortgage, and utilities for the 8 weeks after loan origination if the organization maintains staff levels from March 1 through June 30
   4. Forgiveness
      -Amount of loan forgiven is reduced proportionally if the employer reduces the number of Full Time Equivalents (FTEs) or if wages are reduced by > 25%
      -If the organization has already reduced the workforce, the organization can call back the employees and restore wages within a 30-day window and maintain levels through June 30 to qualify.
   5. Click to read more about the PPP in another blog post on our website.

   ECONOMIC INJURY DISASTER LOANS

   1. Organizations with < 500 employees
   2. Provides up to $2M of working capital loan
      -Based on credit scores
      -No tax returns necessary
      -Can obtain up to $200,000 without a personal guarantee
      -No collateral for loans < $25,000
   3. Interest rate is 2.75% for nonprofits
   4. Payments are deferred up to 1 year
   5. Organization can obtain $10,000 emergency grant within 3 days, no repayment required
      -Can obtain and take the $10,000 emergency grant without accepting the EIDL loan
   6. Interacts with PPP loan – if EIDL rolled into a PPP loan, the $10,000 will be deducted from the forgivable loan amount
   7. Apply through SBA.gov
   8. Click to read more about EIDL in another blog post on our website.

   PAID SICK LEAVE

   DOL Guidance and FAQs available here

   1. Organizations < 500 employees are required to provide 10 days of sick leave to:
      -Employees who have been diagnosed with COVID-19
      -Employees who are caring for a family member with COVID-19
      -Employees who are caring for a child during a school closure
   2. Pay
      -Pay is at employee’s regular rate up to max of $511/day when the employee has been diagnosed with COVID-19
      -Max pay is 2/3 of employee’s rate up to max of $200 per day if caring for a family member
      -Payment up to the maximum is reimbursed by the federal government in full
      -Leave is in addition to other leave programs provided by the employer
      -Businesses with < 50 employees may be exempt from providing leave to care for a child whose school or daycare is closed if providing leave threatens the viability of the business
      -Not available if an employee can work from home

   FMLA

   DOL Guidance and FAQs available here

   1. Organizations with < 500 employees must provide up to 10 weeks of paid leave if an employee needs to care for a child due to school or daycare closure
   2. Pay
      -Max pay is 2/3 of employee’s rate up to max of $200 per day, not to exceed $10,000 in the aggregate
      -Leave is in addition to other leave programs provided by the employer
      -Payment up to the maximum is reimbursed by the federal government in full
      -Businesses with < 50 employees may be exempt if providing leave threatens the viability of the business
      -Not available if an employee can work from home

   Paid Sick Leave and FMLA Exception: If you can prove one of the following items would occur, you can exempt yourself from FFCRA Paid Sick Leave and FMLA items just mentioned:

   • The provision of paid sick leave or expanded family and medical leave would result in the small business’s expenses and financial obligations exceeding available business revenues and cause the small business to cease operating at a minimal capacity;
   • The absence of the employee or employees requesting paid sick leave or expanded family and medical leave would entail a substantial risk to the financial health or operational capabilities of the small business because of their specialized skills, knowledge of the business, or responsibilities; or
   • There are not sufficient workers who are able, willing, and qualified, and who will be available at the time and place needed, to perform the labor or services provided by the employee or employees requesting paid sick leave or expanded family and medical leave, and these labor or services are needed for the small business to operate at a minimal capacity.

   SEPARATE BENEFITS FOR INDIVIDUALS INCLUDED IN THE CARES ACT

   1. Cash gifts - $300 above the line deduction for charitable deductions, may not be to donor advised fund or supporting organization
   2. 100% Charitable Deduction Limit – For 2020, cash gifts to charity (excluding donor advised funds and supporting organizations) are deductible to 100% of AGI. Gift may be for any purpose.
   3. $100,000 IRA Rollover – Owners may withdraw up to $100,000 and recontribute that amount to the IRA within three years for certain circumstances that involve coronavirus. The IRA owner, spouse or a dependent must be diagnosed with COVID-19, the business of the IRA owner must have been closed or damaged due to COVID-19, the IRA owner must have been laid off due to COVID-19, or the IRA owner must be unable to work as well as provide required child care due to COVID-19. Eliminates the pre-age 59 ½ penalty tax on the $100,000 IRA withdrawals and subsequent re-contribution. If not re-contributed within three years, the distribution becomes subject to tax.
   4. Required Minimum Distribution (RMD) Waiver – RMD is waived for IRA and other qualified retirement plan owners for 2020.
   5. Student Loans – Individuals with federally insured loans may benefit from a provision that delays payments for a six-month period. Student loans are not forgiven, but there is no interest or penalty assessed during the six-month period.
   6. Unemployment Benefits - $600 additional amount added to per week amount received by individuals under state unemployment rules. Result could be unemployment payments of over $1,000 per week for a four-month period resulting from combination of federal and state unemployment payments. The state benefits may extend for an additional ten weeks.

   CONTACT:

   Margene Zink, CPA, CGMA
   Partner, Nonprofit Practice
   mzink@klcpas.com | 574.264.2247 x315

3. WEBINAR: Nonprofit Governance 2020 – What to Expect in the Next Decade

   March 26, 2020 1:30 pm Leave a Comment

   What does governance look like in 2020 and beyond for your nonprofit organizations? In today's world, there are many unknowns that affect everything from board habits and cultures to philanthropic trends. Nonprofits can better prepare for the future by understanding the sentiment of current donors and volunteers, various trends and issues affecting nonprofits and by considering the impact of various key indicators and predictors that could affect an organization.

   This webinar will be conducted by a panel of BDO national nonprofit leaders who will discuss current nonprofit trends. This discussion should allow insight into how nonprofit executives can help shape their organization's strategy for 2020 and beyond.

   Webinar Learning Objectives

   • Identify current trends and issues related to governance in today's environment and what governance may look like in the future
   • Recognize how technology and the ever-changing nonprofit environment affects governance in today's world
   • Recognize some of the key performance indicators and predictors that those with governance responsibilities should monitor in their organizations, not only to provide oversight today, but to prepare for tomorrow

   Presenters

   • Andrea Wilson, Partner and National Co-Leader –Nonprofit & Education Practice, BDO USA, LLP
   • Adam Cole, Partner and National Co-Leader –Nonprofit & Education Practice, BDO USA, LLP
   • Marc Berger, National Nonprofit Tax Services Director, BDO USA, LLP

   Credits

   1.5 credits in the field of Accounting

   Register

   This webinar is presented by BDO USA. As an independent member of the BDO Alliance USA, Kruggel Lawton is able to offer this program free of charge to "KLients" and friends of the firm. To register, click the "Register" button below to be sent to BDO's event page. Next, click the RED "REGISTER" button on that page and enter your contact information into the form.

   IMPORTANT: Please make sure you check the box next to "Are you a client of an independent member of the BDO Alliance USA?"

   

4. Webinar: Annual Nonprofit Accounting and Auditing Update

   October 25, 2018 1:00 pm Leave a Comment

   This webinar will provide an overview of the Accounting and Auditing Standards that has been issued by the Financial Accounting Standards Board and the American Institute of CPAs, as well as provide a status report on current projects relevant to the nonprofit sector.

   Webinar Learning Objectives:

   • Upon completion of this course, participants will be able to identify key changes to the audit and accounting guidance that affects the Nonprofit Sector
   • Describe the impact that changes to guidance by the FASB and the ASB on the Nonprofit and Higher Education Industry and the effect on their financial statements
   • Describe transition and implementation considerations for the new guidance relevant to the Nonprofit and Higher Education industry

   Presenters:

   Lee Klumpp, National Assurance Partner - Nonprofit and Education Practice, BDO USA, LLP

   Carla DeMartini, Assurance Director - Nonprofit and Education Practice, BDO USA, LLP

   Credits: 

   Accounting: 2 hr

   Register

   This webinar is presented by BDO USA. As an independent member of the BDO Alliance USA, Kruggel Lawton is able to offer this program free of charge to "KLients" and friends of the firm. To register, click the "Register" button below to be sent to BDO's event page. Next, click the RED "REGISTER" button on that page and enter your contact information into the form.

   IMPORTANT: Please make sure you check the box next to "Are you a client of an independent member of the BDO Alliance USA?"