Friday, March 26, 2021

American Rescue Plan Act Broadens Nonprofits Eligible for PPP

The American Rescue Plan Act of 2021 signed into law on March 11, 2021 provides an additional $7.25 billion in funds to the Paycheck Protection Program (PPP).  The application period for PPP Round 2 loans will end on March 31, 2021, unless extended by Congress.  

In general, charities are eligible for a first-draw PPP loan if they employ fewer than 500 employees (full-time and part-time, who live in the United States) per the nonprofit's physical location of your nonprofit.  The Act expanded PPP eligibility to an “additional covered nonprofit entity,” defined as any nonprofit described in section 501(c) of the Internal Revenue Code (other than organizations described in 501(c)(3), (c)(4), (c)(6), or (c)(19)) and exempt from tax under section 501(a) of the Code, that employs 300 or fewer employees per physical location and does not derive more than 15% of receipts or devote more than 15% of activities to lobbying.  The nonprofit must certify on the PPP application that “[c]urrent economic uncertainty makes th[e] loan request necessary to support ongoing operations.”

Additional resources for nonprofits with respect to the Act can be found here:

 

Nicholas Mirkay, Professor of Law, University of Hawaii

https://lawprofessors.typepad.com/nonprofit/2021/03/american-rescue-plan-act-broadens-nonprofits-eligible-for-ppp.html

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