LAW: CARES Act for Pastors and Churches
March 27, 2020, 2:00 p.m. Pacific Time
Congress passed the CARES Act this afternoon and it was officially signed into law by the President of the United States. Here is how it affects you, the congregation and the church. This email will explain 1) some CARES Act details; 2) church loans; 3) individual and family income; 4) cash contributions to non-profits; and 5) helpful links from The White House, Cal Nonprofits and accounting advice from Ronald Blue & Co.
CARES Act Details:
- Sends direct checks to individual Americans up to $1,200
- Provides grants and loans to churches to meet payroll and pay rent
- Provides liability protection for providers who volunteer (Good Samaritans)
- Allows HSA to be used to purchase OTC medications
- Extends expiring health extenders to November
Church Loans
The process will require a church, a 501c3 organization, to apply for a government loan that will become a grant after 60 days. Why a loan? It’s an accountability step to ensure those requesting loans are truly churches or other non-profits. You can begin the process my submitting an application most likely Monday or Tuesday next week (March 30 or 31) and a link will be provided here soon.
Individual & Family Income
Subtitle B – Rebates and Other Individual Provisions
Section 2201: 2020 Recovery Rebates for Individuals
All U.S. residents with adjusted gross incomes up to $75,000 ($150,000 married), who are not a dependent on another taxpayer and have a work-eligible social security number, are eligible for the full $1,200 ($2,400 married) rebate. In addition, they are eligible for an additional $500 per child. This is true, even for those who have no income, as well as those whose income comes entirely from non-taxable means-tested benefit programs, such as SSI benefits.
For the vast majority of Americans, no action on their part will be required in order to receive a rebate check as IRS will use a taxpayer’s 2019 tax return if filed, or in the alternative their 2018 return. This includes many low-income individuals who file a tax return in order to take advantage of the refundable Earned Income Tax Credit and Child Tax Credit. The rebate amount is reduced by $5 for each $100 that a taxpayer’s income exceeds the phase-out threshold. The amount is completely phased-out for single filers with incomes exceeding $99,000, $146,500 for head of household filers with one child, and $198,000 for joint filers with no children.
The language indicates residents that have a work eligible social security number are eligible for the rebate.
Cash Contributions to Non-profits
Also, Section 2204 allows tax filers to deduct up to $300 of cash contributions, whether they itemize their deductions or not.
Section 2204. Allowance of partial above the line deduction for charitable contributions
The provision encourages Americans to contribute to churches and charitable organizations in 2020 by permitting them to deduct up to $300 of cash contributions, whether they itemize their deductions or not.
Three Helpful Links
1. Cal Nonprofits has a resource website which provides very helpful information for nonprofits here.
2. The White House and Center for Disease Control are sending Faith Based Communities to their resource website here.
3. Ronald Blue & Co CPAs and Consultants, LLP a Christian Accounting company, has provide links for individuals and business who may have questions regarding their specific tax situation, click to view
Individual Provisions and Business Provisions.
Please join Church United April 1-3 for fasting and praying for California!