As Congress moves toward next steps in crafting a package of new and renewed COVID-19 relief programs, an array of details on existing programs was recently released:
Enhanced Charitable Giving Incentives:
The CARES act created a new giving incentive for taxpayers who do not itemize their tax returns and it also removed the 60% Adjusted Gross Income (AGI) restriction on charitable deductions for those who do itemize their tax returns for the 2020 tax year. While the Internal Revenue Service has not yet issued guidance, the Congressional Joint Committee on Taxation issued a report on CARES Act provisions on April 23, specifying that the new non-itemizer deduction's $300 cap applies to each "tax filing unit," which means the limitation applies per tax return, regardless whether filed individually, or jointly by a couple. This gives even more urgency to the request made by theatres and our colleagues in the broader nonprofit sector to lift the $300 cap and apply this important giving incentive to both 2019 and 2020 returns. More than 140 members of the U.S. House of Representatives signed a letter to House leadership this week in support of this and other provisions that will increase the capacity of the nonprofit sector to serve communities.
Paycheck Protection Program (PPP) Loans:
For those still in the process of applying for PPP loans, the Treasury has issued new rules for seasonal employers that allow applicants to determine their maximum loan amount by calculating average monthly payroll over the period of March 1, 2019 to June 30, 2019 (as announced in the original PPP guidelines), or May 1, 2019 to September 15, 2019 (a new timeframe, meant to help those with higher employment in summer months). Interim guidelines for self-employed applicants are also now available, which is important news to share with the 1099 theatre artists who were not permitted to be included in the W-2-focused PPP loans available to theatres.
While all await complete guidance on loan forgiveness for the Paycheck Protection Program, the Treasury continues to update PPP rules by way of additions to its Frequently Asked Questions. New answers have been posted regarding the Small Business Administration's plans to review loan forgiveness applications for loans in excess of $2 million and employee calculations for loan eligibility and forgiveness. Continue to check those FAQs for more updates.
Nonprofits that Self-Insure for Unemployment Benefits:
Unemployment benefit guidance issued to states by the U.S. Department of Labor on April 27 indicates that states must first bill a self-insuring nonprofit for 100% of the costs and payment must be made to the state by the nonprofit. Only then will the 50% reimbursement included in the CARES Act be issued to the nonprofit by the state.
Led by the National Council of Nonprofits, nonprofit advocates are seeking revised rules that would streamline this process and relieve nonprofits of the payment burden. They are also seeking 100% coverage of costs under the next version of COVID-19 relief shaped by Congress.
Pandemic Unemployment Benefits:
While many states have officially opened the application process for unemployment benefits available to self-employed workers, access to those benefits is challenged by overwhelming demands on state systems. Meanwhile, guidelines issued by the U.S. Department of Labor to states is further restricting access to relief meant to be provided under the CARES Act, as some artists who typically earn a mixture of 1099 and W-2 income report being locked out of opportunities for Pandemic Unemployment Benefits. Advocates are pursuing a policy solution, and in the meanwhile, artists should stay connected to their State Departments of Labor for further details.
Please continue to make the case for theatres and theatre artists to your Members of Congress utilizing TCG's advocacy campaign. We encourage you to tell your story and to use the talking points from this policy statement issued by the Cultural Advocacy Group.
We've posted the archive video of the recent CARES and Community Care: A What Now Webinar. Andrew Kaplan of Epstein Becker Green Law generously offered to address unanswered questions from the webinar as well as any additional questions sent to us last week. Because so many have found his contributions to the webinar particularly useful, we've shared a transcript of this section along with all of the questions he answered afterward here.
Please stay tuned as TCG keeps you informed of further updates and essential opportunities to speak up to federal policy leaders.