CBFNC’s Legal Resource Partner, Jason Cogdill, has provided the following bulletin that includes a summary update on two important business issues potentially applicable to your church.
PPP Second Draw Loan Deadline is May 31
For churches and organizations participating in the Second Draw process of the Paycheck Protection Program (“PPP”), the deadline for loan applications is May 31. This is an extended deadline that was originally March 31. If you are already working with a bank on a Second Draw loan, it is likely that all is in order and the deadline is not an issue. If not, you will want to take the necessary steps in the next week to ensure that you have access to funds.
More details about PPP Second Draw loans: https://www.sba.gov/funding-programs/loans/covid-19-relief-options/paycheck-protection-program/second-draw-ppp-loan
To confirm, it is not required that an organization that participated in a First Draw loan participate in this second round of funding for 2021. For organizations that have already applied for or received Second Draw funding for 2021, the next step will be the forgiveness process later this year.
It has been CBFNC’s goal to make PPP information available to churches, including webinars we have provided during the 2020 and 2021 rounds. If any of our sessions would be helpful to you, we can provide upon request or you may access on our Coronavirus Resources page: https://cbfnc.org/coronavirus-resources/#. We expect to provide additional guidance during the forgiveness stage as we did in 2020.
Update on Employee Retention Tax Credit
As employers, churches that meet certain criteria based on employee retention statistics are available to participate in the IRS’s Employee Retention Credit (“ERC”) established by the 2020 CARES Act. This tax credit applied for 2020 and was recently extended through 2021.
The ERC is separate from PPP and is based on several factors, including retention during the COVID period as well as wages paid. The tax credit is applicable to the Social Security tax paid to common-law employees. More details about ERC can be found at: https://www.irs.gov/newsroom/new-law-extends-covid-tax-credit-for-employers-who-keep-workers-on-payroll
If you have questions or need further assistance on these or other topics, you are welcome to contact us at 336.759.3456 or email@example.com.
CBFNC Legal Resource Partner