Also available in pdf format by clicking on the link to the right of your screen.
The current COVID-19 crisis has resulted in many hardships within our Diocese, resulting in employee layoffs and workforce reductions. In order to assist parishes that have experienced financial difficulties as well as parishioners who have had to make personal sacrifices, we have prepared this list of resources which have been made available by Federal, State and New York City programs as of March 30, 2020.
In addition, we have included a useful summary of key Coronavirus Aid, Relief, and Economic Security (“CARES”) Act provisions prepared by the Church Alliance. It describes those provisions that are likely to be of most interest to churches, other ministries and parishioners. The summary reflects those CARES Act provisions as they are understood on March 30, 2020, without any governmental agency guidance, by the persons who prepared the summary on behalf of Church Alliance.
Resources that are identified by an asterisk (*) at the front of a heading directly benefit organizations and will be of immediate interest to leaders of parishes. Parish leaders will want to make their employees (including clergy) and parishioners aware of other resources listed here, which directly benefit individuals.
Please note that this is not intended to be an exhaustive list of all available resources, as Federal, state and local laws are changing daily. All information in this list of resources and accompanying summary of the CARES Act is subject to correction and clarification as more complete and reliable guidance and interpretation regarding the law and available resources become available. This list of resources and accompanying summary are also not intended to be, and should not be construed as, legal, tax, accounting or any other professional advice for any specific fact situation or the eligibility of any person or institution for any of the described resources. For professional advice regarding the subject matter addressed in this list of resources or accompanying summary, you should obtain the services of a competent professional.
Federal
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*CARES Act Small Business Interruption Loan Availability (Paycheck Protection Program) [for small businesses, including churches and other religious organizations] [See also Part A of Summary]
What Is It?
A government program providing business interruption loans of up to $10,000,000 to small businesses, including nonprofits such as religious organizations, of fewer than 500 employees that are impacted by the COVID-19 crisis and that continue to employ and pay workers during the COVID-19 crisis. These loans cover up to eight weeks’ rent and utility payments, certain debt services and healthcare benefits and payroll, of up to $100,000 per employee and are forgivable if they are used solely for these purposes. The maximum Small Business Interruption Loan a borrower can receive is the lesser of $10,000,000 and 2.5 times the borrower’s average monthly payroll and benefits. For businesses with employees with incomes in excess of $100,000, such excess over this threshold will reduce the maximum borrowing amount. The maximum maturity of any non-forgiven portion of any loan is 10 years’ interest at 4%. Loan repayment can be deferred at least 6 months, with a maximum of up to 12 months.The loans are made through banks, although regulatory and underwriting guidance has not yet been developed. There will be a processing fee: 5% for loans of up to $350,000, 3% for loans between $350,000 and $2,000,000, and 1% for loans of $2,000,000 or more. Standard Small Business Administration (“SBA”) fees, collateral, guarantee and credit requirements for SBA loans are waived.
Eligibility
Non-profit organizations are eligible so long as they are organized and operated exclusively for religious, educational, scientific or other charitable purposes and who otherwise meet the requirements of Section 501(c)(3) of the Internal Revenue Code. As long as a church was operating and paying salaries and payroll taxes on February 1, 2020, it is eligible for these loans. If a church already has an existing SBA loan, the CARES Act would waive payment of principal and interest for six months for such loan, but the borrower would not be entitled to a Small Business Interruption Loan.Date Available
The SBA has 15 days after enactment of the CARES Act to issue regulatory guidance.Additional Information: See https://www.sba.gov (“Coronavirus COVID-19): Small Business
Guidance & Loan Resources). -
Recovery Rebates for Individuals [for U.S. residents meeting certain adjusted gross incomeeligibility requirements] [see also Part F of Summary].
What Is It?
All U.S. residents with adjusted gross income of up to certain limits are entitled to receive rebates under the CARES Act. For the vast majority of Americans, no action on their part will be required in order to receive a rebate, because the Internal Revenue Service (“IRS”) will use a taxpayer’s 2019 tax return if filed, or in the alternative their 2018 return. The Secretary of the Treasury has stated that there will be a web-based application for those who don’t receive direct deposit to give the IRS the necessary information.Eligibility
A rebate of $1,200 ($2,400 for joint filers) is available to U.S. residents who are not a dependent of another taxpayer and who have a work-eligible social security number, if their
adjusted gross income is no more than: (i) $75,000 for single filers, (ii) $112,500 for head of household filers, and (iii) $150,000 for joint filers. An additional $500 per qualifying child
under the age of 17 also will be provided.The full rebate is available to individuals who have little to no income or who have non-taxable income from means-tested entitlement programs (e.g., Supplemental Security Income, the Earned Income Tax Credit, and the Child Tax Credit). The total rebate is reduced by $5 for each $100 that a taxpayer’s income exceeds the income thresholds above and is completely phased out for single filers with incomes exceeding $99,000, $146,500 for head of household filers with one child, and $198,000 for joint filers with no children.
Additional Information: See https://www.irs.gov (“Get Coronavirus Tax Relief”).
3. Charitable Contribution Incentives under the CARES Act [for taxpayers] [see also Part E of Summary]
What Is It?
The CARES Act permits individual taxpayers who do not itemize their deductions to deduct up to $300 above the standard deduction. In addition, the cap limiting charitable
deductions to no more than 50% of an individual’s adjusted gross income has been eliminated. For corporations, the limit on charitable deductions has been raised from 10% of taxable income to 25%. The food inventory donation limitation has been increased from 15% to 25%. Date available: The increase in the charitable donation limits will be effective for tax year 2020 (returns for which will be filed in 2021). There may be a permanent increase for future tax years, but that is not yet certain.Additional Information: See https://www.irs.gov (“Get Coronavirus Tax Relief”).
4. *Employee Retention Payroll Tax Credit [for employers] [see also Part B(b) of Summary]
What Is It?
A refundable payroll tax credit of up to $5,000 (or, if less, 50% of the “qualified wages” paid when an employer was an eligible employer, as described below) for each employee
on an employer’s payroll if certain conditions are met. Available for all employers; provided, that if an employer has more than 100 full-time employees, only those employees who are not providing services to the employer due to COVID-19-related causes are eligible (i.e., they are on the payroll but COVID-19-related concerns have prevented them from providing services to their employers).Date Available
The employee retention credit is effective for wages paid after March 12, 2020 and before January 21, 2021.Eligibility and Additional Information
The employer must have carried on a trade or business in 2020 and either (i) the employer’s business operations have been partially or fully suspended as a result of orders from a governmental entity limiting commerce, travel or group meetings or (ii) the employer has experienced a year-over-year reduction in gross receipts of at least 50% on a calendar-quarter comparison basis. For churches and other non-profits, the entity’s whole operations must be taken into account when determining a decline in revenues.Additional Information: See https://www.irs.gov (“Get Coronavirus Tax Relief”)
5. *SBA Economic Injury Disaster Loans [for businesses, including eligible private nonprofits, such as soup kitchens and homeless shelters, but NOT churches]
What Is It?
Small businesses, including non-profit organizations, may apply for Economic Injury Disaster Loans of up to $2,000,000 (more, if the business is a major source of employment)
through the SBA to help mitigate economic losses caused by the COVID-19 pandemic. These Economic Injury Disaster Loans cannot be used to refinance long-term debts. A $10,000 emergency advance can be obtained within 3 days of submitting an application while an Economic Injury Disaster Loan application is pending. The loans are low-interest (2.75% for nonprofits), are not forgivable and are not available to borrowers of Small Business Interruption Loans for the same (duplicate) purposes. These loans are eligible for 12-month deferred repayments and repayment terms of up to 30 years.Date available
Now through December 16, 2020 (the SBA may decide to extend this deadline) Process and additional information: Applicants must pass the eligibility tests (credit check, demonstrated ability to repay the Economic Injury Disaster Loan, and provide collateral for all Economic Injury Disaster Loans that are over $25,000). Although a $25,000 loan can be
borrowed within 5 days, but there may be delays because of high volumes. The application process includes updated financial statements and six-month cash flow projections.Additional information on the Economic Injury Disaster Loan application process:
https://disasterloan.sba.gov/ela/Documents/Three_Step_Process_SBA_Disaster_Loans.pdf
https://www.sba.gov/funding-programs/disaster-assistance
Register for an account to apply online or download application forms:
https://disasterloan.sba.gov/apply-for-disaster-loan/index.html
Additional information on SBA disaster assistance in response to COVID-19:
https://www.sba.gov/page/coronavirus-covid-19-small-business-guidance-loan-resources
https://www.sba.gov/disaster-assistance/coronavirus-covid-19#section-header-1
Resources).
6. Expansion of Unemployment Insurance [for laid-off workers, including employees of nonprofits which pay unemployment insurance benefits, which most churches do not] [see also Part D of Summary]
What Is It?
The CARES Act provides unemployment relief to workers who have been laid off as a result of COVID-19 business interruption, extending existing state unemployment insurance provisions to four months and providing affected workers with an additional $600 per week in unemployment benefits. Although there are no COBRA subsidies for affected workers under the CARES Act, the unemployment benefits provided will not count against a worker’s eligibility for Medicaid or SNAP benefits. The one-week waiting period to receive benefits has been
eliminated.Date Available
Now through December 30, 2020, for up to 39 weeks. The rules are retroactive to January 27, 2020.Additional Information
See https://www.dol.gov/newsroom/releases/osha/osha20200309 (“Guidance for Preparing Workplaces for Coronavirus”)7. Food and Nutrition Service [for individuals]
What Is It?
Provides appropriations to the U.S. Department of Agriculture to fund food and nutrition assistance programs to be administered through Federal and state agencies. During 2020, if a school is closed for 5 consecutive days during the COVID-19 emergency, each
household with at least one child eligible to receive free or reduced price school meals under Federal law can receive financial assistance equal to at least the value of the meals over the course of 5 school days for each eligible child.Date Available
Now through September 30, 2021Process and Additional Information
Eligible persons can receive food authorized by The Emergency Food Assistance Program (“TEFAP”) from a local TEFAP agency or organization (e.g., a food bank) or eating at a soup kitchen or other similar organization. If a person meets state-specific income eligibility
requirements, he/she may take TEFAP home directly.https://fns-prod.azureedge.net/sites/default/files/wic/wic-fact-sheet.pdf
https://www.fns.usda.gov/wic/state-agency
https://www.fns.usda.gov/wic/applicant-recipient
https://www.fns.usda.gov/tefap/tefap-fact-sheet
https://www.fns.usda.gov/tefap/state-local-agency
https://www.fns.usda.gov/tefap/applicant-recipient8. *Payroll Tax Credit for Required Family Leave [for employers]
What Is It?
This section of the Families First Coronavirus Response Act (“FFCRA”) provides a tax credit to eligible employers for wages required to be paid under the Emergency Family and Medical Leave Expansion Act (“EFMLEA”).Date Available
The program will be available once the US Secretary of the Treasury selects an effective date, which is expected to be no later than April 2, 2020.Additional Information
Department of the Treasury and Internal Revenue Service regulations are expected soon. See https://www.irs.gov (“Get Coronavirus Tax Relief”)9. *Payroll Tax Credit for Required Paid Sick Leave [for employers]
What Is It?
This section of FFCRA provides a tax credit to eligible employers for wages required to be paid under the Emergency Paid Sick Leave Act (“EPSLA” ).Date Available
The program will be available once the US Secretary of the Treasury selects an effective date, which is expected to be no later than April 2, 2020.Additional Information
Department of the Treasury and Internal Revenue Service regulations are expected soon. See https://www.irs.gov/ (“Get Coronavirus Tax Relief”)10. *Tax Credit for Family Leave for Eligible Self-Employed Individuals [for self-employed individuals, including ministers]
What Is It?
The FFCRA creates a refundable income tax credit for self-employed individuals who would otherwise be entitled to be paid sick leave under the EFMLEA. The individual must regularly carry on a trade or business under Section 1402 of the Internal Revenue Code and
otherwise have a condition that would entitle them to sick leave under EFMLEA.Date Available
The program will be available once the US Secretary of the Treasury selects an effective date, which is expected to be no later than April 2, 2020.Additional Information
See https://www.irs.gov/ (“Get Coronavirus Tax Relief”). It is expected that the credit will be reflected on the Form 1040 for 2020.11. *Tax Credit for Sick Leave for Eligible Self-Employed Individuals [for self-employed individuals, including ministers]
What Is It?
The FFCRA provides a refundable income tax credit for self-employed individuals who would otherwise be entitled to be paid sick leave under the EPSLA. The individual must regularly carry on a trade or business under Section 1402 of the Internal Revenue Code and
otherwise have a condition that would entitle such person to sick leave under the EPSLA if he or she were an employee of an employer.Additional Information
See https://www.irs.gov/ (“Get Coronavirus Tax Relief”). It is expected that the credit will be reflected on the Form 1040 for 2020.12. *Deferral of Employer-Side Federal Insurance Contributions Act (“FICA”) [for employers] [see also Part B (a) of Summary]
What Is It?
A deferral of employer-side FICA taxes on wages. Employers may defer 50% of employer payroll taxes attributable to wages paid during 2020 until December 31, 2021. The remaining portion is deferred to December 31, 2022. Note that this deferral applies only to the
employer’s portion of FICA, not the employee’s.Date Available
March 27, 2020-December 31, 2020Additional information
See https://www.irs.gov/ (“Get Coronavirus Tax Relief”).13. Mandated COVID-19-Related Family Leave [for employees]
What Is It?
EFMLEA requires certain employers to provide an employee with paid and jobprotected leave of up to 12 weeks in connection with family caregiving needs if the employee is unable to work or telecommute due to a need to care for a minor child if the child’s school or
day care has been closed or if the child’s caregiver is unavailable due to COVID-19. There are eligibility requirements with respect to both the employers and employees. The employees must have been employed for at least 30 days by either (i) private employers with fewer than
500 employees (subject to the limitation contained in the next sentence) or (ii) government employers. Employees of businesses employing fewer than 50 employees may not receive the benefits under the EFMLEA if the EFMLEA’s requirements would jeopardize the business as a
going concern. The amount of paid leave is dependent on the length of the leave. An employer may elect to exclude employees who are health care providers or emergency responders from the benefits of EFMLEA.Dates available
April 2, 2020-December 31, 2020.Additional Information
See https://www.dol.gov/newsroom/releases/whd/whd20200324 (“Coronavirus-Related Paid Family and Medical Leave and Paid Sick Leave”).14. Mandated COVID-19 Related Sick Leave [for employees]
What Is It?: EPSLA requires certain employers (government employers and employers with fewer
than 500 employees, subject to the limitation contained in the next sentence) to provide paid
sick leave if an employee is unable to work because of COVID-19. Employees of businesses
employing fewer than 50 employees may not receive the benefits under the EPSLA if the EPSLA’s
requirements would jeopardize the business as a going concern. The amount of paid leave is
dependent on the length of the leave and the reason for the leave (e.g., COVID-19 symptoms,
subjected to quarantine, caring for quarantined individuals, caring for minor children if their
school or day care provider is closed or if their caregiver is unavailable, in each case due to
COVID-19-related issues).
Dates available: April 2, 2020-December 31, 2020
Additional Information: See https://www.dol.gov/newsroom/releases/whd/whd20200324
(“Coronavirus-Related Paid Family and Medical Leave and Paid Sick Leave”).
15. No-Cost COVID-19 Testing for Individuals with Insurance Coverage [for individuals] [see Part
I of Summary]
What Is It?: FFCRA provides coverage for COVID-19 diagnostic testing without prior
authorization at no cost to the individual. It is available for individuals covered by private
insurance plans and recipients of federal health insurance programs, such as Medicare and
Medicaid. The CARES Act modifications added new provisions designed to avoid technical
problems in connection with new testing methods, as well as a modification addressing the
rates to be paid by health plans for the testing.
Date available: Commencing March 18, 2020; CARES Act modifications to FFCRA requirements
became effective March 27, 2020
Additional Information: See https://www.hhs.gov/ and https://www.coronavirus.gov/
16. Public Health and Social Services Emergency Fund For COVID-19 Testing [for providers of
products or services relating to COVID-19 for uninsured individuals]
What Is It?: A reimbursement program for providers of products, including diagnostic products,
or services relating to COVID-19 supplied to uninsured individuals.
Date available: Not yet. When it becomes available, reimbursement will be available until
September 30, 2021.
Additional information: See https://www.hhs.gov/ and https://www.coronavirus.gov/
17. SNAP Waivers to Facilitate Access to Nutritional Assistance [for individuals]
What Is It?: The FFCRA relaxes certain requirements for unemployed, low-income individuals to
be eligible for SNAP benefits. It provides nutritional benefits during the COVID-19 emergency
for individuals who do not work but who otherwise meet SNAP eligibility criteria.
Date available: April 1, 2020 and continuing during each subsequent month that the COVID-19
health emergency remains in effect.
Additional information: See https://www.usda.gov/ and https://www.coronavirus.gov/
18. *Student Loan Relief [for borrowers of federal student loans and employers that contribute
toward an employee’s student loans] [see Part G of Summary]
What Is It?: A program which allows for contributions by employers of up to $5,250 toward an
employee’s student loans without including such contributions in the employee’s income. In
addition, principal and interest payments on federal student loans are deferred without penalty
on student loans through September 30, 2020. There are also provisions relating to teachers
who cannot finish their year of teaching service as a result of COVID-19.
Eligibility Period: Student loan payments made by an employer to the employee after March 27,
2020 through December 31, 2020; deferral of student loan repayments until September 30,
2020.
Additional information: See https://www.ed.gov/ and https://www.studentaid.gov; also,
https://www.irs.gov)
19. Changes to Retirement Plan Distributions [for eligible individuals affected by COVID-19] [see
Part H of Summary]
What Is It?: A program which permits certain types of distributions, including loans, from
certain qualified retirement plans of up to $100,000 per distribution or per loan (up to the
amount in the plan participant’s account) without penalty. However, in the case of distributions,
such distributions will be included in a plan participant’s gross income ratably over three years.
Also, the CARES Act includes a waiver of the required minimum distribution from qualified
retirement plans.
Effective date: January 1, 2020.
Additional information: See https://www.irs.gov
20. Child Nutrition Response Act [for students and certain residents of adult care centers]
What Is It?: A program to waive certain conditions otherwise imposed on states, schools and
individuals for them to be eligible for financial support for federal nutrition programs. Among
other allowances, the program allows for school meals-to-go while schools are closed due to
COVID-19. It also eases some eligibility requirements otherwise applicable to recipients of
Women, Infants, and Children programs.
Date Available: Now through September 30, 2020
Additional information: See https://www.usda.gov/ and https://www.coronavirus.gov/
21. Maintaining Essential Access to Lunch (MEALS) Act [for students]
What Is It?: A program to ensure that students have access to school meal benefits during
school closures as a result of COVID-19, regardless of eligibility requirements that otherwise
apply.
Date Available: Now through September 30, 2020
Additional information: See https://www.usda.gov/ and https://www.coronavirus.gov/
https://omar.house.gov/media/press-releases/representative-omar-introduces-bill-protectaccess-school-meals-during-school.
22. Relief Under Defense Health Program [for veterans]
What Is It?: A program that appropriates additional funding to the Department of Defense to
cover the costs of COVID-19 diagnostic testing and related services of military TRICARE plans
(health insurance plans for uniformed service members, military retirees and their families).
Date Available: Now through September 30, 2020.
Additional Information: See https://www.health.mil/About-MHS/OASDHA/Defense-HealthAgency/DoD-VA-Program-Office
New York State
1. *Application for the Suspension of New York State Debt Collection (https://ag.ny.gov/covid19-debt-suspension-application) [for individuals and businesses]
What is It?: A program established by the Attorney General of the State of New York for
businesses or individuals impacted by COVID-19 that owe non-medical or non-student debts to
the State of New York which have been referred to the Office of the Attorney General.
Date Available: March 16, 2020 until terminated.
Process: See link to application form above.
2. *Mortgage Forbearance Relief [for businesses and individuals]
(https://www.governor.ny.gov/sites/governor.ny.gov/files/atoms/files/EO_202.9.pdf)
What Is It?: An Executive Order of the Governor of the State of New York requiring forbearance
by banking institutions of payments with respect to a mortgage for any person or entity facing
a financial hardship due to the COVID-19 pandemic.
Effective Dates: March 21, 2020-April 20, 2020.
3. For individuals:
a. Emergency Paid Sick Leave [lead agency: the New York State Legislature and Governor’s
Office] (https://www.governor.ny.gov/news/governor-cuomo-announces-three-way-agreementlegislature-paid-sick-leave-bill-provide-immediate)
b. Mortgage Relief and Overdraft, ATM, and Credit Card Fee Waivers for Borrowers and
Customers Affected by COVID-19 [lead agency: The New York State Department of Financial
Services] (https://www.dfs.ny.gov/reports_and_publications/press_releases/pr20203191)
c. Special Enrollment Period for Uninsured New Yorkers [lead agencies: NY State of Health and
the New York State Department of Financial Services]
(https://www.dfs.ny.gov/reports_and_publications/press_releases/pr202003161)
d. Waiver to Regulatory Requirements for Child Care Program Providers [lead agency: New York
State Office of Child and Family Services] (https://ocfs.ny.gov/main/news/2020/COVID-19-
Waiver-Form-2020Mar16.pdf)
e. Waiver of New York State Medicaid Co-pays for COVID-19 Testing [lead agency: New York
State Medicaid] (https://health.ny.gov/health_care/medicaid/program/update/2020/2020-03-
10_covid-19.htm)
f. Mobile COVID-19 Testing Programs in Westchester and Rockland Counties and in Staten
Island [lead agency/office: New York State Department of Health and the New York State Office
of the Governor] (https://coronavirus.health.ny.gov/covid-19-testing)
g. Temporary Assistance, including SNAP, Provided by Office of Temporary and Disability
Assistance [lead office: Office of Temporary and Disability Assistance]
(https://otda.ny.gov/programs/snap/#overview and
http://otda.ny.gov/policy/gis/2020/20DC013.pdf
h. Pandemic Unemployment Assistance for Workers Affected by Coronavirus [lead agency: New
York State Department of Labor] (https://labor.ny.gov/ui/cares-act.htm and
https://labor.ny.gov/ui/pdfs/pandemic-unemployment-assistance.pdf)
i. Waiver of 7-Day Waiting Period for Unemployment Insurance Due to COVID-19 [lead agency:
New York State Department of Labor] (note that special rules are in place for government
workers, teachers and other school employees: More information on the program is available
here: https://labor.ny.gov/unemploymentassistance.shtm and additional information in the
Claimant Handbook is available here: https://labor.ny.gov/formsdocs/ui/TC318.3e.pdf)
j. Reporting Fraudulent Charitable Activity Related to COVID-19 [lead office: The Office of the
New York State Attorney General’s Department of Law- Charities Bureau] https://ag.ny.gov/
k. Investment Fraud/Scams Related to COVID-19 [lead office: New York State Attorney General]
(https://ag.ny.gov/press-release/2020/attorney-general-james-takes-action-against-coronavirushealth-scams-issues; the complaint form can be found at https://ag.ny.gov/investor-protectionbureau-complaint-form).
l. Price Gouging Complaint Forms For Price Gouging of Essential Goods and Services Related to
COVID-19 (i) [lead office and agency: The Office of the New York State Governor and the New
York Department of State’s Division of Consumer Protection]
(https://www.dos.ny.gov/consumerprotection/form/ComplaintForm1.asp) and (ii) [lead agency:
New York State Attorney General]
(https://formsnym.ag.ny.gov/OAGOnlineSubmissionForm/faces/OAGPGCHome;jsessionid=9Rcr
yxW4iYswEXlTSMWV8O5SdQMVC5iYUn6dFJqoX_gm_El0zdWj!617013267)
m. COVID-19 Testing Sites in New York State (provided by Nuvance Health, a not-or-profit health
system in New York’s Mid Hudson Valley): : https://patients.healthquest.org/novel-coronaviruscovid-19-update-2/covid-19-collection-site-information/
New York City
1. *Employee Retention Grant Program (https://sbsconnect.nyc.gov/contact/;
https://www1.nyc.gov/nycbusiness/article/nyc-employee-retention-grant-program)
What is it?: Grants for businesses, including non-profits (religious institutions are not expressly
included or excluded) which meet all of the following criteria: (1) located within the five
boroughs of New York City, (2) employ 1-4 employees in total across all locations, (3) can
demonstrate that the COVID-19 outbreak caused at least a 25% decrease in revenue, (4) have
been in operation for at least six months, and (5) have no outstanding tax liens or legal
judgments. https://www1.nyc.gov mentions that non-profits are included.
Date Available: March 20, 2020. There are currently no deadlines for submitting an application
Process: To verify loss of revenue, applicants will need to upload the following: (1) financial
documents for two months in 2020 demonstrating revenue decrease due to COVID-19, (2)
financial documents showing the applicant’s revenue for the same two months in 2019, and (3)
financial documents showing the applicant’s revenue for the full 2019 calendar year. To
determine its grant amount, the applicant will need to upload its most recent two months of
payroll records. Finally, to process a grant, the applicant will need to upload (1) a signed
Participation Affidavit verifying that the applicant is eligible for the program and that the
applicant is applying in order to retain its employees, and (2) the applicant’s bank account
information.
Visit SBS Connect and create an account to begin your application:
https://sbsconnect.nyc.gov/covid/eligibility/.
2. *New York City Small Business Continuity Loan Fund
(https://www1.nyc.gov/site/sbs/businesses/covid19-business-financial-assistance.page)
What is it?: Zero-interest loans of up to $75,000 for businesses (religious institutions are not
expressly included or excluded) which (1) are located within the five boroughs of New York City,
(2) can demonstrate that the COVID-19 outbreak caused at least a 25% decrease in revenue, (3)
employ 99 or fewer employees in total across all locations, (4) can demonstrate an ability to
repay the loan, and (5) have no outstanding tax liens or judgments. https://www1.nyc.gov does
not specify that non-profits are included.
Date Available: Not yet announced.
Process: Applicants will be required to demonstrate a 25% decrease in revenue by providing
documentation such as bank statements or CPA-certified profit and loss statements.
Visit https://www.surveymonkey.com/r/N336ZYB to receive additional details about the
program.
3. *New York Community Trust Grants [not for churches but for other New York City-based
nonprofits, including those with human services and arts and culture missions]
(nycommunitytrust.org (“About the NYC COVID-19 Response & Impact Fund”))
4. For individuals:
a. New York City Paid Safe Sick Leave Law [paid by the employer and enforced by the New York
City Department of Consumer Affairs, Office of Labor Policy & Standards]
(https://www1.nyc.gov/assets/dca/downloads/pdf/about/PaidSickLeave-FAQs.pdf)
b. New York City School Meals [lead agency: The New York City Department of Education] (Call
311 or 212-NEW-YORK outside of New York City; text COVID to 692-692
c. New York City Property Tax and Interest Deferral Program [lead agency: The New York City
Department of Finance] (https://www1.nyc.gov/assets/finance/downloads/pdf/ptaid/ptaidinitial-application.pdf)
d. New York City Cash Assistance Program [lead agency: The New York City Human Resources
Administration] (eligibility determination: https://access.nyc.gov/programs/cash-assistance/
;application :https://access-nyc-s3-
uploads.s3.amazonaws.com/uploads/2017/03/Cash_Assistance_Applicaion_EN.pdf)
e. New York City Health Insurance Enrollment Assistance Program [lead agency: The New York
City Department of Health] (Call 311 or 212-NEW-YORK outside of New York City; text
“CoveredNYC” to 877-877)
f. New York City Expedited Supplemental Nutrition Assistance Program (“SNAP”) Benefits [lead
agency: The New York City Human Resources Administration] (eligibility determination:
eligibility is restricted based on the applicant’s household size, income, household expenses
and, in some cases, a work requirement- https://otda.ny.gov/programs/snap; application:
https://otda.ny.gov/programs/applications/4826.pdf
g. New York City Senior Center Grab-and-Go Meals Program [offered by New York City] (Call 311
or 212-NEW-YORK outside of New York City)
h. New York City Regional Enrichment Centers for Children of Essential City Employees [lead
agency: The New York City Department of Education for children of the City’s first responders,
health care providers, transit workers and other public workers] (Call 311 or 212-NEW-YORK
outside of New York City)
i. New York City Remote Learning Resources [lead agency: The New York City Department of
Education for New York City public School students] (Call 311 or 212-NEW-YORK outside of New
York City)
j. New York City Emergency Food Assistance Program [lead agency: The New York City Human
Resources Administration] (Call 311 or 212-NEW-YORK outside of New York City)
EXHIBIT
SUMMARY OF CARES ACT PROVISIONS
Note: This document briefly summarizes provisions in the Coronavirus Aid, Relief, and
Economic Security Act (“the CARES Act”) that could possibly be of interest to church plans,
ministries and plan members. This summary reflects those CARES Act provisions as they
are currently understood on March 30, 2020, without any agency guidance. As guidance is
issued that may be applicable, we plan to provide information to you on that guidance or to
refer you to that guidance but may not be able to update the summary with that information.
This summary may be used by Church Alliance members as a basis for communications to
ministries and plan members. This summary is for general information only. It is not a
complete analysis and should not be relied upon as legal advice.
PROVISIONS DESCRIBED IN SUMMARY
Table of Contents
A. PAYCHECK PROTECTION PROGRAM (“PPP”)…………………………………………………………………………………1
B. PROVISIONS TO HELP EMPLOYERS WITH PAYROLL TAXES ………………………………………………………2
A. PAYROLL TAXES DELAY………………………………………………………………………………………………………………………2
B. EMPLOYEE RETENTION CREDIT FOR EMPLOYERS SUBJECT TO CLOSURE DUE TO COVID-19…………….3
C. ECONOMIC STABILIZATION LOANS ………………………………………………………………………………………………..5
D. PANDEMIC UNEMPLOYMENT ASSISTANCE PROGRAM ……………………………………………………………….5
E. CHARITABLE CONTRIBUTION INCENTIVES……………………………………………………………………………………8
F. RECOVERY REBATES FOR INDIVIDUALS…………………………………………………………………………………………8
G. STUDENT LOAN RELIEF………………………………………………………………………………………………………………………9
H. RETIREMENT PLAN CHANGES ………………………………………………………………………………………………………..10
I. HEALTH PLAN CHANGES …………………………………………………………………………………………………………………11
J. HHS AND DEPARTMENT OF EDUCATION FUNDING …………………………………………………………………12
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A. Paycheck Protection Program (“PPP”)
Executive Summary
PPP loan program is designed to keep small businesses, including qualifying non-profit
organizations, afloat during mandated Coronavirus Disease 2019 (“COVID-19”) related closures.
This new loan program is based on the existing general business loan program of the Small
Business Administration (“SBA”) and will make potentially forgivable loans available to qualifying
small businesses. The loan program is known as the “7(a)” program and not based on the SBA
disaster loan program.
Additional detail will be provided as the SBA drafts implementing regulations, which the CARES
Act requires to occur within 15 days.
Eligibility
Most non-profit organizations, that generally have less than 500 employees, are eligible to apply.
Select non-profit organizations with more than 500 employees may qualify if the organization
has an employee headcount less than the employee size standard, if any, under the applicable
NAICS Code.
In evaluating eligibility for such loans, lenders are to consider: (1) whether the borrower was
operational on February 15th, and (2) whether the borrower was paying salaries and payroll taxes
on independent contractors at that time.
The SBA affiliation rules will be applied to non-profit organizations in the same way as they are
applied to small businesses. Under these rules, generally the SBA considers whether
organizations control or are controlled by another organization.
Borrowing Limits
The CARES Act appropriated $349 billion for loans under this program. The maximum PPP loan
available to any company is $10 million or, if less, 2.5 times the average monthly payroll costs of
the company over the year prior to the making of the loan, excluding any annual compensation
above $100,000 for any person, prorated for February 15 through June 30, 2020.
Note: Under the CARES Act, “payroll costs” include payments for vacation, parental, family,
medical, and sick leave; allowances for dismissal or separation; group health care benefits
(including insurance premiums); retirement benefits; and State or local tax assessed on the
compensation of employees, as well as payments of any compensation to an independent
contractor that are wages, income, earnings from self-employment or similar compensation.
Use of Proceeds
PPP loan proceeds may be used for:
• Payroll costs, excluding the prorated portion of any compensation above $100,000 per year
for any person
• Mortgage interest and rent payments
• Utilities
• Interest on debt that existed as of February 15, 2020
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Terms
PPP loans bear interest at a maximum rate of 4% and mature no later than 10 years after
determination of the amount, if any, to be forgiven. Payments under PPP loans may be deferred
for 6-12 months, and the SBA is directed to issue guidance on the terms of this deferral. PPP
loans have no collateral or personal-guarantee requirements.
Loan Forgiveness
PPP loans can be forgiven to the extent that the loan proceeds have been used for the following
costs incurred and payments made during the eight-week period after the loan is made:
• Payroll costs, excluding the prorated portion of any compensation above $100,000 per year
for any person
• Mortgage interest (but not prepayments or principal payments) and rent payments, on
mortgages and leases in existence before February 15, 2020
• Certain utilities, including electricity, gas, water, transportation, and phone and Internet
access for service that began before February 15, 2020
Caveats:
• The amount forgiven is reduced based on failure to maintain the average number of
full-time equivalent employees versus the period from either February 15, 2019,
through June 30, 2019, or January 1, 2020, through February 29, 2020, as selected
by the borrower.
• The amount forgiven is also reduced to the extent that compensation for any
individual making less than $100,000 per year is reduced by more than 25% measured
against the most recent full quarter.
• Reductions in the number of employees or compensation occurring between February
15, 2020, and 30 days after enactment of the CARES Act will generally be ignored to
the extent reversed by June 30, 2020.
• Under the language of the CARES Act, there is no exclusion for churches and other
religious organizations (collectively referred to herein as “religious organizations”).
According to information from the offices of Senators James Lankford and Marco Rubio
(https://www.rubio.senate.gov/public/_cache/files/ac3081f6-14ae-4e6f-9197-
172ede28badd/71AB6CB05A08E369E0D488A80B3874A5.faqs—paycheck-protectionprogram-faqs-for-small-businesses.pdf), religious organizations may participate in this
loan program. It is unclear at this time whether participation in this program may
result in the borrower being considered a recipient of federal funds, which may cause
the borrower to be subject to federal laws to which it would otherwise not be subject.
The Church Alliance will be advocating with the SBA to make this program as beneficial
as possible for religious organizations.
B. Provisions to Help Employers with Payroll Taxes
The CARES Act includes two provisions related to employment (payroll) taxes, which are intended
to encourage employers to retain employees and to smooth cash flow concerns related to
remission of payroll taxes to the Internal Revenue Service (“IRS”).
a. Payroll Taxes Delay
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The CARES Act creates a “payroll tax deferral period” running from March 27, 2020 through the
end of 2020. Employers (and self-employed individuals as explained below) may defer payment
of the “employer share” of the Social Security tax they otherwise are responsible for paying to the
federal government with respect to their employees. Employers generally are responsible for
paying a 6.2% Social Security tax on employee wages. For religious organization employers this
is generally limited to Social Security taxes on the wages of lay (non-clergy) employees.
It is important to understand that this is not a payroll tax holiday, but a postponement; the 2020
taxes deferred must be paid in the following two years (2021 and 2022). This is intended to
allow employers to spread these payroll tax costs over time, which may free up existing cash and
other assets to continue to fund essential operations, pay wages, and provide employee benefits.
The deferred payroll taxes must be paid over the following two years, with half of the amount
required to be paid by December 31, 2021 and the other half by December 31, 2022.
Please note, this payroll tax deferral program will not be available to any organization that has
had a PPP loan forgiven. Until guidance is issued, the safest course would be to refrain from
deferring payroll taxes, if the organization will be seeking to obtain a PPP loan and have it
forgiven.
The CARES Act also allows self-employed individuals to defer payment of part of the Social
Security taxes they would otherwise owe the IRS. By statute, clergy are considered self-employed
for employment tax purposes, generally paying self-employment (“SECA”) taxes instead of sharing
the payment of Social Security taxes with their employers. This provision in the CARES Act would
allow clergy to defer paying the employer portion of Social Security taxes (6.2%) but they would
still have to timely pay the employee share (also 6.2%) of Social Security taxes as part of their
SECA tax payments. The deferred Social Security self-employment taxes must be paid over the
following two years, with half of the amount required to be paid by December 31, 2021 and the
other half by December 31, 2022.
b. Employee Retention Credit for Employers Subject to Closure Due to COVID-19
Summary
Employers can receive a refundable credit against applicable employment taxes of up to $5,000
per employee in 2020.
Employers with 100 or fewer full-time employees (measured by average employment in
2019) –this credit applies if the employer fully or partially suspends operations due to an
order from a government authority or if the employer experiences a decline in revenue
for any calendar quarter in 2020 of 50% or more compared to the same calendar quarter
in 2019. All qualifying wages count towards this credit, whether employees are working
or not.
Employers with more than 100 full-time employees (measured by average employment in
2019) –the same conditions apply as for employers with 100 or fewer employees
described above, but the credit only applies to qualifying wages paid to employees who
are not working.
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Credit Amount
50% of qualified wages (see bullets below) paid to an employee on or after March 13, 2020 (and
before January 1, 2021) in each calendar quarter, up to a total of $10,000 per employee for all
quarters. (50% of $10,000 = maximum credit of $5,000/employee for the year)
The credit is against an employer’s applicable employment taxes (see bullets below) for each
calendar quarter, with any excess refunded to the employer.
Qualified Wages
• Employers with more than 100 full-time employees on average during 2019 = wages paid
to employees not providing services due to a COVID-19-related suspension of operations
or significant decline in gross receipts
• Employers with 100 or fewer full-time employees on average during 2019 = wages paid
to any employee, whether working or not
• Wages are only included if paid during the period from March 13, 2020 through December
31, 2020.
• Does not include payments made under section 7001 or 7003 of the Families First
Coronavirus Response Act (“FFCRA”) (required paid sick leave or required paid family
leave)
• Includes pro-rata portion of employer’s qualified health plan expenses to the extent such
amounts are excluded from an employee’s gross income and properly allocated to those
employees with qualified wages
• Wages included are those defined in Internal Revenue Code (“Code”) section 3121(a) and
compensation defined in Code section 3231(e)
o Note: service performed by ministers in the exercise of their ministry is excluded
from the definition of employment in Code section 3121
Applicable Employment Taxes
These employment taxes include the employer portion of Social Security taxes (Code Section
3111(a)), which generally is 6.2% of an employee’s wages, reduced by any of the following credits
received by an employer:
• employment of qualified veterans under Code section 3111(e)
• research expenditures of qualified small businesses under Code section 3111(f)
• required paid sick leave under section 7001 of the FFCRA
• required paid family leave under section 7003 of the FFCRA
Eligible Employer
• An employer (including a tax-exempt employer) carrying on trade or business during
calendar year 2020 that experiences a full or partial suspension of operations due to
orders from a government authority limiting commerce due to COVID-19, or that
experiences a significant decline (more than 50%) in gross receipts when compared to the
same quarter in the previous year
• All persons treated as a single employer under Code section 52(a) or (b), or Code section
414(m) or (o) are treated as one employer
o Note: organizations eligible to participate in a church plan are treated as a single
employer only under Code section 414(c), so this rule should not apply to such
organizations
5
• Employers receiving a PPP loan (described in section A of this summary) are not eligible
for this credit.
The credit no longer may be claimed when the full $10,000 per employee qualified wage
maximum is reached, or when an employer’s gross receipts for a quarter in 2020 are greater than
80% of the gross receipts for the same calendar quarter in 2019.
C. Economic Stabilization Loans
The CARES Act created a loan and loan guarantee program aimed at economic stabilization. This
program will provide loans to the airlines and other named industries, but also specifies that the
Treasury Department will seek to implement a program through the Federal Reserve that provides
financing to banks and other lenders to make direct loans to nonprofit organizations “to the
extent practicable”.
The loans under this Federal Reserve program will be available to mid-sized businesses and nonprofit organizations, with between 500 and 10,000 employees. Although there is no loan
forgiveness, the interest rate on these loans can no higher than two percent and would not accrue
interest or require payments for at least the first six months.
These loans will be subject to certain loan criteria and obligations, including:
• The funds received must be used to retain at least 90 percent of the recipient’s workforce,
with full compensation and benefits, through September 30, 2020;
• The recipient will not abrogate existing collective bargaining agreements for the term of
the loan plus an additional two years; and
• The recipient must remain neutral in any union organizing effort for the term of the loan.
D. Pandemic Unemployment Assistance Program
The CARES Act creates a temporary Pandemic Unemployment Assistance program (“PUAP”) to
provide payment to those not traditionally eligible for unemployment benefits and who are unable
to work as a direct result of COVID-19. The Act also provides enhanced benefits for all workers
eligible for unemployment. Unlike the FFCRA, which only applies to private employers with fewer
than 500 employees, the CARES Act applies to all employers regardless of size.
Unemployment benefits are State-based programs and the eligibility criteria, amount of benefits
and funding (taxes or premiums) for the coverage depend on the State involved. Generally,
unemployment compensation benefits replace about one-third to one-half of wages. A list of the
State programs and benefits can be found at
https://oui.doleta.gov/unemplov/content/sigpros/2020-2029/Januarv2020.pdf.
The CARES Act expands and enhances the unemployment benefits available under State programs
by
• expanding the availability of benefits to individuals who are not covered by a State
program;
• extending the time period for State benefits to make them available for up to 39 weeks
in total, expiring December 31, 2020,
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• providing for an additional $600 weekly payment available for up to four months
(expiring July 31, 2020), allowing temporarily for a higher rate for low-wage workers,
and
• adding a short-term compensation benefit for workers who have not been laid off but
whose employment and wages have been reduced due to COVID-19.
Eligibility of Workers for Non-Profits and Religious Organizations
The Act extends coverage to workers who are self-employed, seeking part-time employment (if
permitted under state law), do not have sufficient work history, or otherwise would not qualify
for regular unemployment under state or federal law and become unemployed or cannot find
work due to COVID-19. The program is intended to cover independent contractors too.
In an Unemployment Insurance Explainer on the CARES Act prepared by the House Ways and
Means Republicans on March 20, 2020, it states:
“Are self-employed and independent contractors eligible?
Yes. Self-employed and independent contractors, like gig workers and
Uber drivers, are eligible for Pandemic Unemployment Assistance. This
also covers workers laid off from churches and religious institutions who
may not be eligible under the State’s program.” (Emphasis added.)
In many States, non-profit organizations, including religious organizations, may elect to
participate in the State program and pay the unemployment compensation taxes or to be selfinsured for unemployment benefits (typically making contributions through the State system once
an employee is eligible for benefits). In some States, religious organization are exempt from the
State program. While the CARES Act provides coverage for unemployed workers of such
organizations, how the States will administer the benefits for these workers will depend on each
State. To determine how to apply for benefits in a State, the U.S. Department of Labor maintains
a website with information on each State at
https://www.careeronestop.org/WorkerReEmployment/UnemploymentBenefits/unemploymentbenefits.aspx.
For non-profits that would normally be self-insured for unemployment benefits (typically making
contributions through the State system once an employee is eligible for benefits), they would only
be responsible for paying 50% of the unemployment benefits their employees collect as opposed
to 100%. The CARES Act provides that the federal government will reimburse the State for the
remaining 50% of those benefits. Employees at these organizations will also be eligible for the
additional $600 per week benefit under the PUAP. After the first 26 weeks of the employee’s
benefits expire under regular State unemployment laws, an employee of these non-profits would
become eligible for the expanded benefits under the PUAP, which would grant an additional 13
weeks of benefits.
While employees of other non-profit organizations and religious organizations, which may
normally be exempt from state unemployment requirements, are immediately covered by the
PUAP under the CARES Act, it is yet to be seen how States will administer those provisions for
those unemployed workers or how long it will take to process the claims of such workers.
7
Eligible Individuals
In addition to the above-mentioned requirements, covered individuals are those who are
unemployed, partially unemployed, or unable to work because:
• They have tested positive for COVID-19 or are experiencing symptoms of COVID19 and are seeking a medical diagnosis;
• A member of their household has been diagnosed with COVID-19;
• They are providing care for a family or household member who has been
diagnosed with COVID-19;
• A child or other person in the household for whom they have primary caregiving
responsibility is unable to attend school or another facility that is closed as a direct
result of COVID-19, and such school or facility care is required for the individual
to work;
• They cannot reach the place of employment because of a quarantine imposed as
a direct result of the COVID-19 public health emergency;
• They cannot reach the place of employment because the individual has been
advised by a health care provider to self-quarantine due to concerns related to
COVID-19;
• They were scheduled to commence employment and do not have a job or are
unable to reach the job as a direct result of the COVID-19 public health emergency;
• They have become the breadwinner fora household because the head of the
household has died as a direct result of COVID-19;
• They had to quit their job as a direct result of COVID-19;
• Their place of employment is closed as a direct result of the COVID-19 public
health emergency; or
• They meet any additional criterial established by the Secretary for unemployment
assistance.
Employees who are able to telework with pay and those who are receiving Emergency Paid Sick
Leave (“EPSL”) or Family and Medical Leave Act-Public Health Emergency Leave under the FFCRA,
or are receiving paid leave under an employer plan or state or local law, cannot simultaneously
receive unemployment benefits under the CARES Act.
Workers who voluntarily quit are not eligible for these benefits.
Eligibility Period
Covered individuals will receive benefits for weeks of unemployment, partial unemployment, or
inability to work caused by COVID-19 beginning on or after January 27, 2020 and ending on or
before December 31, 2020, for as long as the unemployment, partial unemployment or inability
to work caused by COVID-19 continues.
Benefit Amount
Under the Act, the weekly benefit amount for most workers is equal to the amount authorized
under the State law where the covered individual was employed. As noted above, for workers not
covered by a State law, or for self-employed individuals, the weekly benefit is calculated under 20
C.F.R. § 625.6, which is the Disaster Unemployment Assistance (“DUA”) program already in place
under Federal law. DUA benefits are administered by the State but funded by the Federal
government. The minimum weekly benefit amount is the average benefit amount of the State.
8
The Act also enhances unemployment compensation benefits for all eligible individuals – whether
eligible under the expansion in the CARES Act or under applicable state law. The enhanced
benefits include an additional $600 per week (even if this takes the employee above their preunemployment earnings level), the elimination of waiting periods (a measure many states already
have taken), and an additional 13 weeks of eligibility for benefits (39 weeks in total). It is
anticipated that these benefits will be carried out through agreements between each state and
the federal government.
Short-Term Compensation Program
The Act provides funding to support states that develop a “short-time compensation” program
for employers that reduce hours in lieu of a layoff (but not for seasonal, temporary or intermittent
employees). Many states already have so-called “work share” programs that provide for partial
unemployment benefits when employers do hours reductions, or partial furloughs, in lieu of
layoffs.
Under such a program, employees whose hours have been reduced would receive pro-rated
unemployment benefits, and the federal government would fund 100% of the costs employers
incur by retaining employees at reduced hours through December 31, 2020. This is intended to
provide an incentive for employers to reduce employee hours in lieu of laying off employees.
E. Charitable Contribution Incentives
Allowance of Partial Above the Line Deduction for Charitable Contributions
The provision encourages individuals to contribute to religious, charitable and educational
organizations by creating a new “above the line” deduction (i.e. for taxpayers who take the
standard deduction). This deduction will permit them to deduct up to $300 of annual monetary
contributions. This is applicable for tax years beginning after 2019 and does not sunset after
2020 like the increased limits described below.
Modification of Limitations on Charitable Contributions during 2020
The provision increases the limitations on deductions for charitable contributions by individuals
who itemize, as well as corporations. Such cash contributions must be made during 2020, and
this provision does not extend the due date of the 2020 tax return.
For individuals, the 50-percent of adjusted gross income limitation is suspended for cash
contributions made in 2020. For corporations, the 10-percent limitation is increased to 25
percent of taxable income for cash contributions made in 2020. This provision also increases
the limitation on deductions from 15-percent to 25-percent of net income for corporate food
donations made during 2020.
F. Recovery Rebates for Individuals
All U.S. residents with adjusted gross income of up to certain limits are entitled to receive rebates
under the CARES Act. For the vast majority of Americans, no action on their part will be required
in order to receive a rebate, because the IRS will use a taxpayer’s 2019 tax return if filed, or in
the alternative their 2018 return. The Secretary of the Treasury has stated that there will be a
web-based application for those who don’t receive direct deposit to give the IRS the necessary
information. Below are some of the details:
9
• A rebate of $1,200 ($2,400 for joint filers) is available to U.S. residents who are not a
dependent of another taxpayer and who have a work-eligible social security number, if
their adjusted gross income is no more than: (i) $75,000 for single filers, (ii) $112,500
for head of household filers, and (iii) $150,000 for joint filers.
• An additional $500 per qualifying child under the age of 17 also will be provided.
• The full rebate is available to individuals who have little to no income or who have nontaxable income from means-tested entitlement programs (e.g., Supplemental Security
Income, the Earned Income Tax Credit, and the Child Tax Credit).
• The total rebate is reduced by $5 for each $100 that a taxpayer’s income exceeds the
income thresholds above and is completely phased out for single filers with incomes
exceeding $99,000, $146,500 for head of household filers with one child, and $198,000
for joint filers with no children.
• The rebate may be electronically deposited into any account authorized by the taxpayer,
on or after January 1, 2018, to receive a federal income tax refund or other federal
payment.
• A letter is to be mailed to a taxpayer’s last known address within 15 days after a rebate
has been paid describing the amount and method of the payment and a phone number at
the IRS to call in case the payment is not received.
G. Student Loan Relief
Exclusion for Certain Employer payments of student loans
The provision expands tax-free educational assistance to include student loan repayments for
employees. It enables employers to provide a student loan repayment benefit to employees on a
tax-free basis.
Under the provision, an employer may contribute up to $5,250 annually toward an employee’s
student loans, and such payment would be excluded from the employee’s income. The $5,250
cap applies to both the 2020 student loan repayment benefit as well as other educational
assistance (e.g., tuition, fees, books) provided by the employer under current law. The provision
applies to any student loan payments made by an employer to the employee or directly to the
lender on behalf of an employee after March 27, 2020 and before January 1, 2021.
Temporary Relief for Federal Student Loan Borrowers
Principal and interest payments are deferred without penalty on federal student loans through
September 30, 2020. No interest will accrue during this period and the borrower will be treated
as if payments were made for purposes of loan forgiveness and loan rehabilitation programs.
Collection activity on such loans also must cease during the period ending September 30, 2020.
Borrowers have the option to continue to pay principal on their student loans during this period.
The CARES Act requires notices to be provided to borrowers about the deferral period. It also
requires notices to be issued beginning on August 1, 2020 about resumption of payment
obligations and options with respect to such obligations.
Service Obligation to Teachers
For teachers who could not finish their year of teaching service as a result of COVID-19, their
partial year of service will be counted as a full year of service toward TEACH grant obligations or
Teacher Loan Forgiveness. The CARES Act waives a requirement that teachers must serve
10
consecutive years of teaching service for Teacher Loan Forgiveness eligibility, if a teacher’s
service is not consecutive as a result of COVID-19.
H. Retirement Plan Changes
Coronavirus-Related Distribution
The CARES Act adds a new category of in-service distribution, referred to as a “coronavirus-related
distribution,” available to qualified individuals regardless of whether the distribution would
otherwise be permitted. A coronavirus-related distribution is a distribution of up to $100,000
for a taxable year made from a 401(a) plan, 403(b) plan, governmental 457(b) plan, or IRA on or
after January 1, 2020, and before December 31, 2020, to a “qualified individual.” A qualified
individual is an individual who:
• is diagnosed with COVID-19 by a test approved by the Centers for Disease Control and
Prevention (“CDC”), or
• has a spouse or dependent diagnosed with COVID-19 by a test approved by the CDC, or
• experiences adverse financial consequences as a result of (i) being quarantined,
furloughed or laid off or having work hours reduced due to COVID-19, (ii) being unable to
work due to lack of child care due to COVID-19, (iii) being unable to work due to closing
or reducing hours of a business owned or operated by the individual due to COVID-19, or
(iv) other factors as determined by the Secretary of the Treasury.
Importantly, the plan administrator may rely on an employee’s certification that one of the above
conditions is satisfied in determining whether a distribution is a coronavirus-related distribution.
An employer is responsible for complying with the $100,000 distribution limit only with respect
to the retirement plans it and any employer in its controlled group maintains.
A coronavirus-related distribution is not treated as an eligible rollover distribution, mandatory
withholding does not apply, and a 402(f) special tax notice is not required. Additionally, the 10%
early distribution penalty tax does not apply.
Unless a participant elects otherwise, a coronavirus-related distribution will be included in the
participant’s gross income ratably over three tax years beginning with the year of distribution. A
participant who receives a coronavirus-related distribution may repay the distribution in one or
more contributions to any eligible retirement plan to which a rollover contribution can be made
within three years of the distribution. The repayment will be treated for tax purposes as a direct
rollover (or, if made to an IRA, as a trustee-to-trustee transfer) made within 60 days of
distribution.
This new distribution category appears to be optional, although the 10% early distribution tax
would not apply to a distribution that qualified under another distributable event (such as
severance from employment) and also met the coronavirus-related distribution definition.
Loan Rule Changes
The CARES Act increases the loan limits for any loan made from a 401(a), 403(b) or governmental
457(b) plan to a qualified individual during the 180-day period beginning on March 27, 2020.
The CARES Act increases the maximum loan amount to $100,000 (currently $50,000) and permits
loans up to 100% (currently 50%) of the present value of the participant’s account.
11
The CARES Act also extends the due date for a qualified individual with an outstanding loan (on
or after March 27, 2020) under a retirement plan. If the due date for any loan repayment occurs
during the period from March 27, 2020 through December 31, 2020, the due date for the
repayment is delayed one year. Any subsequent repayments of the loan are required to be
adjusted to reflect both the delayed due date and any interest accruing during such delay, and
the delay is disregarded for purposes of determining compliance with the five-year term limit.
Only “qualified individuals” are eligible for this loan relief. The term qualified individual has the
same meaning as described above for a coronavirus-related distribution. However, unlike with
respect to the coronavirus-related distributions, there is no provision in the loan rule changes
that allow the plan administrator to rely on an employee’s certification that he or she is a
“qualified individual.”
The loan rule changes that temporarily increase the amount of available loans appear to be
optional. However, the loan rule that extends the repayment date of an outstanding loan may be
required.
Required Minimum Distribution Waiver
Effective January 1, 2020, the CARES Act waives required minimum distributions (“RMDs”) for
defined contribution 401(a) plans, 403(b) plans, governmental 457(b) plans, and IRAs for calendar
year 2020. The waiver applies to RMDs required to be made in 2020 and to 2019 RMDs that are
required to be made by April 1, 2020 (if not already made in 2019). For purposes of determining
RMDs after 2020, an individual’s required beginning date is determined without regard to this
2020 waiver.
In addition, the five-year distribution period that applies to certain beneficiaries will be
determined without regard to calendar year 2020.
If an eligible rollover distribution paid in 2020 would have been an RMD for 2020 but for the
waiver, the distribution is not subject to the direct rollover rules, 20% mandatory withholding
requirement, or the 402(f) notice.
Amendment Deadline
Plan sponsors must amend their plans for the CARES Act changes by the last day of the first plan
year beginning on or after January 1, 2022, e.g. December 31, 2022 for calendar year plans.
I. Health Plan Changes
The CARES Act made a couple of technical amendments to the FFCRA, adding new language to
the requirement that group health plans cover testing for COVID-19. The new language is
designed to avoid technical issues slowing up new testing methods1
. Self-insured church health
plans may want to defer to their third-party administrators on the application of that language.
1 For example, the amended language requires coverage of a test for which the developer has
requested emergency use authorization under 21 USC Section 360bbb-3, unless the request has
been denied or the developer does not submit a request under this section within a reasonable
time.
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The other technical amendment deals with rates to be paid by health plans for the testing. Group
health plans may pay a negotiated rate, if one was in effect prior to the public health emergency.
If the plan did not have such a rate, the plan may pay the cash price (which the provider is required
to list on a public internet site during the emergency period2
), or the plan may negotiate a rate
less than that price.
Another CARES Act provision seems designed to smooth the way for payment of vaccines when
they are developed. “Any qualifying coronavirus preventive service 3 “ will be treated as
“preventive”4 care that group health plans will have to cover at no cost.
High-deductible health plans will be permitted to cover telehealth and other remote care services
without a deductible, for plan years beginning on or before December 31, 2021. (Coverage by a
plan that pays for such services without a deductible will be disregarded for purposes of other
forbidden coverage.) The provision takes effect on March 27, 2020.
There are two provisions that deal with protected health information (“PHI”). One is designed to
allow for additional care coordination by aligning the confidentiality rules for substance abuse
disorder treatments with the HIPAA rules generally.5 The other directs the Secretary of HHS to
issue guidance on the sharing of PHI during the various categories of public health emergency
that have been declared. The guidance is due within 180 days of March 27, 2020.
The CARES Act also expands the types of expenses that can be reimbursed from consumer-driven
health plans (e.g., health savings accounts, health reimbursement arrangements, healthcare
flexible spending accounts etc.) to include over-the counter drugs without a prescription.
J. HHS and Department of Education Funding
The CARES Act appropriated funds for various other programs that may be of interest to the
religious organizations we serve. We have listed the most notable on the following page:
Department of Health and Human Services-Administration for Children and Families
• Child Care and Development Block Grant- $3.5 billion was appropriated for grants to
states for immediate assistance to childcare providers to prevent them from going out of
business and otherwise support childcare for families
• Community Services Block Grant- $1 billion was appropriated in direct funding to local
community-based organizations to provide a wide range of social services and emergency
assistance
2 The emergency period is the one declared under section 319 of the Public Health Service Act, 42 USC
247d.
3 “Qualifying” means an item intended to prevent or mitigate coronavirus that is either recommended (with
an A or B grade) by the US Preventive Services Task Force or “effectively recommended” by the Advisory
Committee on Immunization Practices of the Centers for Disease Control and Prevention.
4 Under Section 2713(a); the waiting period interval under Section 2713(b) is to be disregarded, and the
coverage requirement will be effective instead 15 days after the pertinent recommendation.
5 There is a fair amount of detail in the section, but it appears to be technical material that would not be a
priority for any potential efforts to change anything on behalf of the Church Alliance, so in the interest of
brevity further detail is deferred.
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Department of Education
• Elementary and Secondary Education – $13.5 billion was appropriated in formula funding
for states to help schools respond to coronavirus and related school closures, meet
immediate needs of students and teachers, improve the use of education technology,
support distance education and make up for lost learning time.
o Religious and other private schools are eligible for funding from this program
based on the following section of the CARES Act:
“ASSISTANCE TO NON-PUBLIC SCHOOLS
SEC. 18005.
(a) IN GENERAL. — A local educational agency receiving funds under sections
18002 or 18003 of this title shall provide equitable services in the same manner
as provided under section 1117 of the ESEA of 1965 to students and teachers in
nonpublic schools, as determined in consultation with representatives of nonpublic schools.
(b) PUBLIC CONTROL OF FUNDS. — The control of funds for the services and
assistance provided to a non-public school under subsection (a), and title to
materials, equipment, and property purchased with such funds, shall be in a
public agency, and a public agency shall administer such funds, materials,
equipment, and property and shall provide such services (or may contract for the
provision of such services with a public or private entity).”
• State Flexibility Funding – $3 billion was appropriated in flexible formula funding to be
allocated by states based on the needs of their elementary and secondary schools and
institutions of higher learning. Religious and other private schools are eligible for this
funding, under section 18005, shown above. The CARES Act specifically states that the
state flexibility funds may be used to “provide support to any other…education related
entity within the State that the Governor deems essential for carrying out emergency
educational services to students” and that such uses include “the protection of educationrelated jobs.”
• Project SERV [sic] – $100 million was appropriated in targeted funding for elementary and
secondary and schools and institutions of higher learning to respond to the immediate
needs of coronavirus and the effect on students.
• Higher Education – $14.2 billion was appropriated in funding to institutions of higher
education to directly support students facing urgent needs related to coronavirus, and to
support institutions as they cope with the immediate effects of the virus and school
closures. This provides targeted formula funding to institutions of higher education, as
well as funding for minority serving institutions and HBCU’s.
