The CARES Act’s Paycheck Protection Loan program allows recipients to have their loans converted into nontaxable grants if certain criteria are met. Many churches have participated in this program, and their leaders now eagerly want to know how to ensure as much of their respective loan is forgiven as possible.
Time is increasingly of the essence, too. Since loans are administered over eight-week periods, many recipients are already at or past their halfway points, so the time to apply for forgiveness is coming soon. Additionally, how loan proceeds get handled and tracked are crucial parts of documenting eligibility for forgiveness.
But official guidance regarding loan forgiveness hasn’t been issued yet. Until any formalized announcements get made, churches can only operate from what’s been publicly provided up until this point. To help churches, we asked CPA and tax attorney Ted Batson—a Church Law & Tax advisor at large—to walk through the loan forgiveness application process as we currently understand it.
The first part of his work can be found in this free, detailed article. The second part will come through a free webinar I’m hosting with Batson on May 20—which will elaborate on his article, plus cover any new developments occurring between now and then. If your church participated in the PPP, don’t miss either of these resources.
On a related note, we mentioned last week that new guidance pertaining to audits of PPP loan recipients—in terms of their good-faith certifications and use of loan proceeds—was issued, along with a safe-harbor deadline to pay back a loan if a recipient decided they didn’t truly need one. That safe harbor has been extended to this Thursday (May 14, 2020).
Also this week:
- Help church board members clarify their roles and responsibilities with this nine-question checklist.
- A California appeals court recently ruled the teachers in a synagogue’s preschool were not ministers, thus opening the door for the civil courts to resolve a dispute under the state’s wage-and-hour law.
The Lord bless you and keep you,
