COVID-19 Economic Relief for Small Business and Nonprofits

Updated: Apr 23

While public health is top priority during the Covid-19 pandemic, the requirement to shut down non-essential businesses has left many organizations wondering how they will financially recover. Below is information on economic relief and recovery options for public and private organizations. This blog will be updated regularly as more options become available.



Tax Filing and Payments


On March 18, 2020 the IRS and Treasury released Notice 2020-18 to provide tax deadline relief for taxpayers affected by the Coronavirus. The Notice states the following:


  • The filing due date for any individual, a trust, estate, partnership, association, company or corporation tax return due on April 15, 2020 has been pushed to July 15, 2020.

  • The payment due date for any individual, a trust, estate, partnership, association, company or corporation with a tax liability due on April 15, 2020 has been pushed to July 15, 2020. The postponed payment can be made without filing an extension or incurring interest or penalties. There is no monetary limit on the amount of payment that can be postponed to July 15, 2020.

  • First and second quarter estimated tax payments for any individual, a trust, estate, partnership, association, company or corporation normally due on April 15th can be postponed to July 15th without incurring interest or penalties.

  • Foreign Bank and Financial Account Form FinCEN 114 (FBAR) is automatically extended to October 15 each year. No postponed due date was required.

  • Partnerships (Form 1065) and S-Corporations (Form 1120-S) with a March 15 due date did not receive relief under any Covid-19 legislation. Any payments not paid by the due date are considered late and will incur penalties and interest.

  • Please note, states are not required to meet the postponed deadline, however, many will accommodate this relief. A list of updated state filing due dates can be found here.

  • Nonprofits, please see NONPROFIT section below for tax filing updates provided under Covid-19 legislation.


Economic Relief

  • Under the Families First Coronavirus Response Act, businesses with fewer than 500 employees can take advantage of the Paid Sick Leave Credit and Child Care Leave Credit, designed to immediately and fully reimburse them, dollar-for-dollar, for the cost of providing Coronavirus-related leave to their employee from March 18, 2020 through December 31, 2020. To take immediate advantage of the paid leave credits, businesses can retain and access funds that they would otherwise pay to the IRS in payroll taxes. If those amounts are not sufficient to cover the cost of paid leave, employers can seek an expedited advance from the IRS by submitting a streamlined claim form that will be released next week. (This credit also applies to self-employed individuals under similar circumstances. These credits will be claimed on their income tax return and will reduce estimated tax payments.)

Small businesses with fewer than 50 employees will be eligible for an exemption from the leave requirements relating to school closings or child care unavailability where the requirements would jeopardize the ability of the business to continue.

  • The Small Business Administration (SBA) is providing loans to pay fixed debts, payroll, accounts payable and other bills that can’t be paid because of the disaster’s impact. The interest rate is 3.75% for small businesses without credit available elsewhere; businesses with credit available elsewhere are not eligible.

  • The Federal Deposit Insurance Corporation (FDIC) has encouraged all financial institutions to meet the needs of customers affected by the coronavirus. In cases in which operational challenges persist, regulators will expedite, as appropriate, any request to provide more convenient availability of services in affected communities.

Private Loans & Grants


  • Facebook is offering $100 million in cash grants and ad credits to small businesses with 2-50 employees. For more info, click here.

  • On April 6, 2020, The Visa Foundation announced $210 million commitment to support small businesses, with $10 million supporting COVID-19 relief.

  • Verizon provided LISC, a funding resource, with $2.5 million to provide grants to small businesses belonging to entrepreneurs, people of color, women and other underserved business owners impacted by Covid-19. For more information, click here.


Business Planning & Counseling


  • Many local and city small business agencies are offering business counseling to services struggling due to the financial impact of Covid-19. Contact your local small business agency for counseling services.

  • Struggling small businesses in need of guidance on what to do next can check out this SOS Business Planning Guide from COLLECTIVE, an Oregon based tax, accounting and consulting firm.


CARES Act


Additional economic relief provisions were provided under the CARES Act. See highlights from those provisions here.



Tax (Information) Return Filing and Payments

  • IRS Notice 2020-23, Section III extends the due date for Forms 990, Forms 990-PF (private foundation return) and 990-T (unrelated business income return) with federal filing or payment obligations between April 1, 2020 and July 15, 2020 to July 15, 2020.

  • Nonprofits maintain the option to extend the due date to November 15 by filing the appropriate extension form.


Grants


  • More than 20 large foundations have signed A Call to Action: Philanthropy's Committment During Covid-19. The participating foundations will lossen or eliminate restrictions on current grants to allow nonprofits to meet immediate financial needs due to the Coronavirus pandemic.

  • The Council of Foundations has provided a list of community-based resources that are providing financial support to nonprofits affected by the Coronavirus pandemic.

  • Candid has a list off nonprofit funding resources organized by geographic location.

  • Additional resources by state can be found at Community Foundations.

  • The Private Loans and Grants listed under BUSINESS above are also available to nonprofits that meet the listed qualifications.

  • Many grant funds are being distributed to state endowments (i.e. The California Endowment). Please visit your local endowment for information on how to apply for grant funds.


Consulting and Recovery


The organizations below are qualified to help nonprofit organizations apply for grants, increase impact and recover from economic injury incurred by Covid-19. Please visit their websites for more info:



Economic Relief


  • The Economic Relief provisions listed under BUSINESS above are applicable to eligible nonprofit organizations exempt from tax under section 501(c)(3) or 501(c)(19) of the Internal Revenue Code.


CARES Act


Additional grants and economic relief provisions for nonprofits were provided under the CARES Act. See highlights from those provisions here.


This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisers before engaging in any transaction.

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The mission of The Little CPA is to share information I have learned as a Certified Public Accountant that will

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