COVID-19 Resources for Land Trusts
As our country continues to navigate the coronavirus pandemic and the impacts on the land trust community, the Land Trust Alliance is dedicated to ensuring we provide critical services to our members. This includes doing all that we can to identify information and new resources to help land trusts during this challenging time.
We also have developed a package of policy recommendations that we are using to educate decision makers on programs that support land conservation, contribute to our country’s economy and create jobs. Land is inarguably a part of our nation’s response to the COVID-19 pandemic. You can find our COVID policy recommendations here.
Since March, four emergency response packages aimed at providing economic relief have been signed into law. Many of the programs established in these bills remain available today and can help the land trust community with everything from keeping staff employed to keeping the doors open to keeping staff healthy and providing incentives for charitable donations. You can find information on these resources below.
As new legislative packages are proposed and new relief efforts come online, we will continue to keep this website updated to help you identify resources that can offset the impacts of the virus and the related economic slowdown on our community. As always, consult with your own legal, financial and/or tax counsel in determining specifically how any regulations apply to your organization.
In addition to reviewing these resources, you should visit the Alliance Learning Center,* which includes the Ask the Expert Forum. There, Alliance staff and land trusts from across the nation are posting resources and strategies to address the crisis.
You should also know that the Alliance is working as part of a national coalition of nonprofits to ensure future emergency response bills provide additional support for our community.
We will update this page as new information and resources become available, so check back often.
Keeping Staff Employed: The Paycheck Protection Program
The Paycheck Protection Program application period closed on August 8.
In October, the SBA issued a new Interim Final Rule and SBA Form 3508S, a new loan forgiveness application, to streamline the forgiveness process for loans of $50,000 or less. You can find the new application here and the new Interim Final Rule here. The new streamlined authority expires on October 31.
Background on the Paycheck Protection Program:
The Paycheck Protection Program was established in the Coronavirus Aid, Relief and Economic Security Act. This program offered small businesses, nonprofits and independent contractors with 500 or fewer employees loans that can be forgiven. The funds can be used for payroll and certain expenses including rent, mortgage and utilities through existing Small Business Administration lenders. Subsequently, the Paycheck Protection Program and Healthcare Enhancement Act was signed into law increasing funding for the PPP from $349 billion to $659 billion.
In June, the Paycheck Protection Program Flexibility Act was signed into law, creating greater flexibility for recipients interested in seeking loan forgiveness.
The increased flexibility for the PPP should be very helpful for land trusts that received loans. Please consult with your legal, financial and/or tax counsel to determine what these changes would mean for your organization.
Paycheck Protection Program Loan Forgiveness
On Aug. 11, the Small Business Administration issued an updated FAQ on Paycheck Protection Program loan forgiveness. At the same time, it also issued FAQs on the overall loan program, which you can find here.
On May 15, the Small Business Administration and the U.S. Department of Treasury issued SBA Form 3508, the Paycheck Protection Program Loan Forgiveness Application. The application includes guidance and worksheets for calculating forgiveness of PPP loans.
- It includes a page of “Representations and Certifications” regarding the use of the funds, which should be carefully reviewed.
- It outlines the calculation used to determine whether or not forgiveness will be reduced for a decrease in the number of full-time equivalent employees or a decrease in employee salaries and wages.
- It requires you to list the name of all employees with the last four digits of social security numbers and compensation for each listed employee.
- It establishes an “Alternative Payroll Covered Period” that begins on the first day of the first pay period for borrowers with a biweekly or more frequent pay periods.
- It includes a detailed list of documents that must be submitted with your application, as well as documents that must be maintained but not submitted. These documents must be retained for six years after the loan is forgiven.
A link to SBA Form 3508 is here
On June 11, the SBA issued an update to the PPP Interim Final Rule that implements the provisions in the Paycheck Protection Program Flexibility Act. The IFR underscores that loan recipients who spend less than 60% of loan funds on payroll expenses qualify for partial forgiveness. You can find a link to the updated IFR here.
On June 23, the SBA updated the Paycheck Protection Program Flexibility Act IFR to provide information on how and when to apply for loan forgiveness. The update also included examples of how to calculate eligible expenses. The updated IFR is available here.
IRS Issues Notice Regarding Tax Deductions and the Payment Protection Program
On April 30, the IRS issued Notice 2020-32, which says that organizations that received PPP loans cannot claim normally fully deductible tax deductions such as wages and rent. It is possible that Congress will reverse the rule. Forbes published two articles on the new rule, which you can find hereand here.
In response to Notice 2020-32, Senator Finance Committee Chairman Chuck Grassley (R-Iowa) and Ranking Member Ron Wyden (D-Oregon) joined Sens. John Cornyn (R-Texas), Marco Rubio (R-Fla.) and Tom Carper (D-Del.) to introduce the Small Business Expense Protection Act. This bill would clarify that nonprofits can deduct expenses paid with a forgiven PPP loan from their taxes. You can find a link to the Senate press release here.
Check out the Paycheck Protection Program FAQ and find additional information on the SBA website.
Employee Retention Credit
If you did not apply for or receive funding from the Paycheck Protection Program, but are seeking economic relief, you may want to look at the Employee Retention Credit, which was established under the CARES Act.
You cannot apply for this credit if you received a PPP loan.
The Employee Retention Credit is a fully refundable tax credit to encourage nonprofits to keep employees on their payroll. It provides a credit equal to 50% of qualified wages – including qualified health plan expenses – up to $10,000 on wages paid after March 12,and before January 1, 2021.
You can find additional information about the Employee Retention Credit here and on the FAQs page.
The IRS provided additional guidance on how eligible employers should treat health care expenses under the Employee Retention Credit, which you can find here. The IRS also clarified that employers who received a PPP loan, but return it in full by May 14 will be eligible to apply for an Employee Retention Credit. Employers who received PPP loans and have the loans forgiven are not eligible for this program. You can find additional information here.
Keeping Your Doors Open: Economic Injury Disaster Loans
The CARES Act made nonprofits eligible for SBA Economic Injury Disaster Loansfor the first time ever. The Paycheck Protection Program and Healthcare Enhancement Act also made farmers and ranchers that employ less than 500 people eligible to apply for these loans.
The CARES Act created the COVID-19 Emergency EIDL Grant which is an advance of up to $10,000 to small business owners (including nonprofits) with no more than 500 employees in all U.S. states, Washington D.C. and territories. The loan advance provides economic relief to businesses that are currently experiencing a temporary loss of revenue. Funds will be made available within three days of a successful application, and these emergency grants will not have to be repaid.
Similar to the initial PPP funds, the SBA Emergency EIDL Grant funds were exhausted quickly, but the Paycheck Protection Program and Healthcare Enhancement Act allocated an additional $10 billion to this program.
On June 15, the SBA started accepting applications for emergency EIDL grants from eligible small business as well as U.S. agricultural business. You can access information about applying for an Emergency EIDL Grant here.
The Small Business Administration’s Economic Injury Disaster Loan program provides small businesses with working capital loans of up to $2 million that can provide vital economic support to small businesses to help overcome the temporary loss of revenue they are experiencing.
It is important to understand that traditional SBA EIDL loans do need to be repaid — they are not grants.
Economic Injury Disaster Loan applications are available through the SBA website.
Keeping Staff Healthy: Medical Leave Updates
Recent changes to federal law have significantly altered medical leave benefits for many employees. It’s important that land trusts account for changes that apply to them and their employees. A full outline is available here and an abbreviated summary follows.
On March 18, the president signed H.R. 6201, the "Families First Coronavirus Relief Act," into law. The law, among other things, requires paid sick leave for employees and expands the Family and Medical Leave Act. Additionally, the president signed H.R. 748, the “Coronavirus Aid, Relief, and Economic Security (CARES) Act,” into law on March 27, which lowered the amount that employers must pay as required by H.R. 6201. The provisions in these bills may affect you and your employees.
H.R. 6201 requires that all employers of fewer than 500 employees provide paid sick leave and family health leave to workers and families directly impacted by coronavirus. H.R. 748 lowered required payment amounts to employees. Employees who have been quarantined or are showing symptoms of coronavirus must be paid their full wages – up to a maximum of $511 a day and an aggregate of $5,110. Those who must miss work to take care of family members, including school-age children, must be paid no more than $200 per day or $2,000 aggregate.
These costs will be covered by the Treasury, through refundable tax credits that can be used against employment taxes (Social Security and Medicare taxes). Any unused credits will be refunded. You can apply for these funds as you need them by filing new IRS Form 7200 – you do not need to wait to file your quarterly reports. You can find instructions for IRS Form 7200 here and a link to the Form here. Details will be coming on how refunds will become available. Note that if an employer continues an employee’s health insurance coverage while the employee is on paid sick leave, the credit will also include the employer’s expense for this.
On April 29, the IRS issued additional guidance for filing IRS Form 7200 to help employers’ common mistakes they were seeing. You can find additional information here.
The Secretary of Labor has the power to exempt businesses of fewer than 50 employees if complying would force them out of business
There are additional changes to employee benefits. The bills require employers to provide paid leave under FMLA of 1993 to employees who fit the specific definitions for sick leave. That pay is limited to $200 per day and an aggregate of $10,000. (FMLA provides for up to 60 days of leave, and any leave taken under these emergency provisions counts toward that total.)
FMLA is further amended by defining an eligible employee as an employee who has been employed for at least 30 calendar days by the employer. It also provides for rehired employees which include employees laid off by the employer not earlier than March 1, 2020, who had previously worked for the employer for not less than 30 of the last 60 calendar days prior to the employees lay off and was rehired by the employer.
Similar to the above, the secretary of Labor has the power to exempt businesses of fewer than 25 employees if complying would force them out of business. And as with the sick leave, an employer’s cost of providing this leave pay will be covered by a refundable credit against employment taxes.
For more detailed guidance on this topic, visit the Department of Labor website.
Encouraging Americans to Donate: Adjustments to cash donations to charitable organizations for tax year 2020
The CARES Act includes provisions that encourage Americans to contribute to churches and charitable organizations in 2020:
- Taxpayers can claim up to $300 for cash donations to charitable organizations on their federal income tax return, even if they do not itemize deductions;
- The 50% adjusted gross income limitation is suspended for cash contributions to charitable organizations by individuals; and
- The 10% limitation for corporations is increased to 25% of taxable income.
Additional information on these provisions can be found in Sections 2204 and 2205 in the CARES section-by-section fact sheet.
Please Note: Beware COVID-19 Scams
If you receive calls, emails or other communications claiming to be from the Treasury Department and offering COVID-19 related grants or stimulus payments in exchange for personal financial information, or an advance fee, or charge of any kind, including the purchase of gift cards, please do not respond. These are scams. Please contact the FBI at www.ic3.gov so that the scammers can be tracked and stopped.
Fraud involving payment of Federal taxes should be reported to the Treasury Inspector General for Tax Administration.
*The Learning Center is a service offered to Alliance-member land trusts, affiliates and individual supporters at the $500 level and above.