How the CARES Act Affects Churches
On March 27th, President Trump signed the bipartisan Coronavirus Aid, Relief and Economic Security (CARES) Act into law. The law will now need to be implemented, and the relevant federal agencies have yet to send official guidance on how to apply for certain available funds, and the exact criteria involved.
The potential benefits for churches in the CARES Act can be significant. However--due to a lack of certainty in how federal agencies and the courts will interpret the law, expected delays in churches and their employees receiving the funds made available by the law, and potential difficulties smaller churches might have in navigating the application process for these programs--we anticipate that short-term, immediate relief will still be needed
Based on our reading of the legislation, and an overview of available resources (some of which are linked to at the bottom of this document), churches can benefit from the following provisions in the law.
(We will continue to update this document as more information about implementation of the CARES Act becomes available.)
Direct Tax Rebate
“If you are a U.S. resident with adjusted gross income under $75,000 ($112,500 for head of household and $150,000 married), are not the dependent of another taxpayer and have a work-eligible Social Security Number (“SSN”), you are eligible for the full $1,200 ($2,400 married) rebate. If you have children, you are also eligible for an additional $500 per child.
The rebate amount is reduced by $5 for each $100 your income exceeds the phase-out threshold. The amount is completely phased-out if your income exceeded $99,000, $146,500 for head of household filers with one child, and $198,000 for married couples with no children. For a typical family of four, the amount is completely phased out for those with incomes exceeding $218,000.” (From Guidestone)
Unemployment Benefits
The law significantly expands unemployment benefits for those affected by COVID-19. “Individual workers who have been fired or furloughed (i.e., put on temporary leave due to special needs of a company or employer), would qualify for an expansion of unemployment benefits that would expand unemployment insurance by 13 weeks and include a four-month enhancement of benefits of $600 a month, on top of what state unemployment programs pay. The maximum duration of unemployment benefits has also been set to 39 weeks
Last month state programs paid an average $385 weekly to unemployed workers. So with the added benefits, the average unemployed worker would receive $985 per week for 16 weeks, and then $385 for up to 23 more weeks.
Also qualifying are freelancers and gig workers, such as Lyft or Uber drivers, as well people seeking part-time work who have been furloughed. People who quit their job as a “direct result of COVID-19” would also qualify (states typically do not allow workers who quit to receive unemployment benefits).” (From The Gospel Coalition’s Joe Carter)
Small Business Loans--Paycheck Protection Program
A $349 billion dollar fund was created by the bill to provide loans to small businesses and non-profit organizations with the aim of preventing mass layoffs. According to Senate Majority Leader Senator Mitch McConnell, churches are eligible for this program. The program provides a loan for approximately 2.5 times an organization’s average monthly payroll costs. This loan is forgivable if the organization maintains its payroll (does not lay off employees), which would make it essentially a grant.
Churches should work with their bank to assess how best to apply for the loan. (See Vanderbloemen for more details)
Additional Resources:
The Gospel Coalition--The FAQs: How the Stimulus Bill Affects Churches and Individuals
Guidestone--COVID Pandemic Phase III Stimulus Package makes churches eligible for relief
Vanderbloemen--Details of CARES Act: The Financial Bridge that Churches, Schools & Nonprofits Need
Front Porch News--CARES Act could bring Financial Relief to Churches Amidst Bans on Large Gatherings
Spanish Resources:
“COVID-19: Plan de Acción Iglesias Latinas”: https://nalec.org/wp-content/uploads/2020/03/COVID19IGLESIALATINA.pdf
“COVID-19, Spanish-language Webinar “Cares ACT y La Iglesia Latina”: https://youtu.be/22z4qIciojM (NALEC YOUTUBE PAGE)
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