Finances are one of many uncertainties in the midst of the COVID-19 (Coronavirus) pandemic. However, with the help of new legislation, there are lots of new ways to find financial support. The Iowa, Nebraska, and South Dakota Conferences of the United Church of Christ (UCC) are here to help you understand how new legislation like the CARES Act can help your congregation find financial stability.
Looking for other COVID-19 resources for churches and communities? Visit our health page. Want to talk with staff and other church leaders about finances? Visit our calendar to join a Zoom meeting.
Church-Specific Financial Resources
PPP Flexibility act of 2020
Analysis and support from the UCC Office of General Counsel on the PPP Flexibility Act of 2020.
Faith-based orgs Facts
Q&A for faith-based organizations on the Paycheck Protection Program and EIDL Program.
Q&A with The Baptist Press on how churches/pastors are eligible for relief in the new stimulus package.
Church Law and Tax
Information and guidance on the legal and risk management considerations your church needs to make.
'Be Not Afraid'
Advice from the financial staff of the Southern New England Conference of the UCC.
National UCC updates
Legislative updates and information from the United Church of Christ (UCC) Office of General Counsel.
Unpacking the CARES Act
Information and resources listed below are drawn from an article on Money.com, “It’s Not Just a $1,200 Check. Here Are All the Other Ways You Can Benefit From the Coronavirus Stimulus Package”.
The stimulus package, officially named the Coronavirus Aid, Relief and Economic Security (CARES) Act, includes funding to prop up industries and to shore up financial lending markets, but the act also has a number of provisions designed to help out ordinary Americans and small business owners struggling with their finances as the COVID-19 virus upends normal life as we know it.
Here are the key parts of the CARES Act you’ll want to keep on your radar in the coming weeks and months — because you’re bound to benefit.
New Tax Deadline
The deadline for filing and paying federal income tax on your 2019 income is now from April 15th to July 15th. If you’re anticipating a refund, it’s still a good idea to go ahead and file by April 15th to get the money faster.
If you file for an extension, it will only give you until October 15th, or six months from the regular filing deadline, as in any normal year.
File for Unemployment – $600 more a week
The stimulus package includes unemployment insurance provisions for part-time and gig workers, people who are self-employed, and raises benefits by as much as $600 a week (depending on your state and incone). Those eligible can also receive unemployment for up to an additional 13 weeks. To file for unemployment, go directly to your state’s program and follow its guidelines.
Take an Extra Tax Deduction for Charitable Donations
The new legislation lets you deduct an additional $300 to donations made to a qualified 501(c)3 nonprofit organization. This move to encourage people to give back is an above-the-line deduction, meaning that even people who don’t itemize and take the standard deduction when filing taxes will be able to take advantage of it.
Break on Student Loan Interest
The CARES Act builds on previously announced student loan relief that would have given borrowers with federal student loans a 60-day forbearance and 0% interest accrual for that period. Now, the Department of Education says forbearance will last through the end of September, and interest is being held at 0% for that time period.
The one caveat is that this doesn’t apply to private student loans, only to loans held by the federal government — that is, loans that list the U.S. Department of Education as the lender. If you’re not sure if your loan qualifies, you can go to http://www.studentaid.gov to find out.
Delay the Mandatory IRA Distribution
If you’re above the age of 70 ½ and ordinarily would have to take a required minimum distribution from your retirement account, you can defer that for 2020.
While most might welcome the extra cash infusion, stable retirement savers might want to wait out the current stock market volatility. The amount of your required distribution is based on how much your account is worth at the end of the previous year and stocks are down by roughly 20% from where they were at the end of 2019.
Make Penalty-Free 401(k) and IRA Withdrawals
The stimulus bill temporarily waives the age threshold of 59 ½ for making retirement account withdrawals without having to pay a 10% penalty. The stipulation is good for withdrawals up to $100,000 and covers IRAs, 401(k)s and 403(b)s. You also get three years to pay off the associated income tax on the distribution, or three years to pay yourself (that is, your account) back.
Withdrawing money from your 401(k) shouldn’t be your first choice because withdrawing that money when the stocks are low and highly volatile could make it hard to catch-up later once the market recovers.
Suspend Your Mortgage Payment
If you have a federally-backed mortgage and you’ve lost income due to the COVID-19 outbreak, you can get a 60-day forbearance on your mortgage payments, with the option to extend that for up to four additional 30-day periods. To do so, you must contact your lender and explain your situation; your lender can’t charge you penalties or fees during this time. The legislation also includes a 60-day moratorium against starting foreclosure proceedings against borrowers with federally backed mortgages.
Also, tenants living in buildings whose owners have federally-backed mortgages cannot be evicted for failing to pay rent for 120 days, and can’t be charged penalties or fees for nonpayment.
$1,200 Stimulus Check
The CARES Act will to issue cash payments to millions of Americans. Taxpayers earning up to $75,000 a year will get $1,200 for each adult ($2,400 for married couples who file jointly and earn up to $150,000), plus $500 for each child under the age of 17. The payment amount has an income-based phase-out; if you earn $99,000 or more—or if a couple earns $198,000 or more—with no dependents, the payment drops to $0.
Most stimulus checks will be sent via direct deposit, and officials have said they will start being issued in late April. In order to get the stimulus check, you need to have filed tax returns for 2019 or 2018, or draw Social Security benefits.
Get A Small Business Loan
The bulk of the $367 billion the stimulus package allocates for small business assistance is a $350 billion “Payroll Protection Program.” It aims to give small business owners a cash infusion to cover employee compensation — including salaries or hourly wages along with benefits — for up to two and a half months, along with other overhead expenses like mortgage payments and utility bills.
These funds are structured as forgivable loans with an interest rate cap of 4% and available to businesses with 500 or fewer employees. The maximum amount is $10 million, which will be forgiven if the business keeps its workers on the payroll rather than furloughing them or firing them. Small businesses can apply for emergency grants of up to $10,000 after applying for a loan to help ease an immediate cash crunch.
You can get more details from the Small Business Administration website, and apply for an SBA disaster loan here (the estimated time for completing an application is over two hours). The program is operational starting on Friday, April 3rd, and small business owners should be able to apply for loans and be approved by banks on the same day.
Is this timeline realistic? Banks said no, as Politico reported, “because the Trump administration has failed to provide them with the necessary guidelines and set requirements for the loans that are unworkable.” Before April 3rd, lenders said that SBA loans could be delayed for weeks, or even longer, because of the overwhelming number of applications expected, as well as confusion over loan requirements and the approval process.
The U.S. Senate Committee on Small Business & Entrepreneurship and the U.S. Chamber of Commerce have resource guides to help small business owners understand their options and the ramifications.