Stimulus 2021: What You Need To Know

Just before 2020’s final curtain, Congress passed a stimulus package that promises $900 billion in funding to still struggling businesses and organizations with under 300 employees. Gratefully, nonprofits will continue to receive support, with just a few changes from the previous bill.

As the Chronicle of Philanthropy reports: “Aside from helping nonprofits directly, the measure also helps the people they serve — especially those behind a surge in requests for aid from food banks, housing charities, and other social-services groups.” 

According to the Chronicle, here are some key components of the bill that will affect nonprofits, directly and indirectly

• In the new measure, Congress extended that provision for tax year 2021, allowing single people to deduct up to $300 and couples to deduct up to $600 in charitable gifts even if they don’t itemize. This is great news for your donors.

• The bill also extends for one year the previous stimulus law’s increased limits (100%, increased from 60% pre-pandemic) in deductible charitable contributions for individuals who itemize and for corporations. 

• Under the new legislation, that cap for the Paycheck Protection Program is reduced from 500 to 300 employees. Loans will be limited to $2 million per organization, down from $10 million under the previous stimulus law.

• Recipients must show they have had at least a 25 percent drop in revenue to qualify. Under that provision, many of the 180,000 nonprofits that received loans in the first go-round will no longer qualify.

• The legislation for unemployment insurance extends until March 14, 2021, a reimbursement provision in the previous stimulus law for nonprofits that self-fund unemployment benefits.

• It will boost the refundable payroll tax credit by reducing the amount of required year-over-year decline in gross receipts from 50 percent to 20 percent, as well as increase the credit from 50 percent to 70 percent of workers’ “creditable wages” up to $14,000 per worker. This provision is a significant benefit to larger nonprofits that were largely left out of Covid relief

For more details, please see the original article and the National Council of Nonprofits synopsis. Resilia is here to help! Please reach out to us at www.resilia.com/consultation with any questions.