The U.S. Senate will vote tonight or tomorrow on its version of the American Rescue Plan Act of 2021, the $1.9 trillion COVID relief package that President Biden has proposed. The U.S. House of Representatives approved it last Saturday, and the Senate has made several changes. Some highlights of the American Rescue Plan Act for nonprofits include:

Many of these important provisions are included in the American Rescue Plan Act because of the persistent advocacy of nonprofits. Once it passes the Senate, the House will vote on the Senate-approved version one more time next week so that both chambers approve identical language. President Biden is expected to sign it into law before unemployment benefits expire on March 14. Because Congress is using the budget reconciliation process for this COVID relief plan, it only needs 50 votes to pass the Senate (most bills require 60 votes for Senate approval).

Last week, President Biden announced a two-week period in which the Small Business Administration (SBA) will only process PPP loans for businesses and nonprofits with fewer than 20 employees. The priority period runs through March 9. The Center encourages nonprofits with fewer than 20 employees that are considering applying for a first-draw or second-draw PPP loan to apply by March 9.

On Monday, the Internal Revenue Service issued guidance on the changes to the employee retention tax credit. Under the federal COVID relief plan that was enacted in late January, many more nonprofits may now be eligible for this refundable payroll tax credit. Notably, nonprofits that have received PPP loans are also permitted to claim the employee retention tax credit, but the same wages cannot be counted for both seeking forgiveness of the PPP loan and calculating the employee retention credit. For example, a nonprofit with $200,000 in payroll expenses between April 1, 2020 and June 30, 2020 that received a $150,000 forgivable PPP loan to cover part of these personnel expenses may now be able to apply for the employee retention tax credit to recoup part of the other $50,000 in payroll expenses that weren’t covered by its PPP loan.

The new IRS guidance explains when and how employers that received a PPP loan can claim the employee retention credit for 2020 and provides answers to technical questions that nonprofits may have in determining their eligibility for the tax credit. The new guidance only applies to the 2020 employee retention credit; the IRS plans to offer additional guidance on the 2021 tax credit in the near future.

This week, the NC House of Representatives and NC Senate both unanimously passed a bill (H.B. 196) that provides additional COVID relief for schools, businesses, nonprofits, and communities. Among other things, the bill:

Governor Cooper is expected to sign this bill into law soon. Legislators will likely take up additional COVID relief legislation once President Biden signs the American Rescue Plan Act into law and there is additional federal aid for states. 

As part of the COVID relief package that was approved in December, most Americans were eligible for Economic Impact Payments – or stimulus payments – in the amount of $600 for each person in their household. The IRS has made direct deposits or issued checks for these stimulus payments, but many North Carolinians – particularly those with low incomes who don't typically file federal income tax returns and those with children – may not have received these payments or may not have received the full amount they are due. The IRS has a tool to allow individuals to check the status of their stimulus payments.

Individuals and families that did not receive their stimulus payments are eligible for a Recovery Rebate Credit, which they can claim by filing IRS Form 1040 and using line 30. The Center strongly encourages nonprofits – particularly those serving North Carolinians in poverty and those serving children – to help spread the word to ensure that those who did not receive their full Economic Impact Payments file a Form 1040 and use line 30 to request their stimulus payments.

Nonprofits are trusted messengers, and many North Carolinians are more likely to take important public health actions if the message comes from a familiar nonprofit organization rather than a government official. Your nonprofit can make a big difference in fighting the COVID-19 pandemic by spreading information about the availability, safety, and importance of vaccines and about the continuing importance of wearing masks and social distancing when in public. 

On Tuesday, Governor Roy Cooper announced that North Carolina is expediting its plans for vaccinations of North Carolinians. As of Wednesday, frontline essential workers – including social workers, public health workers, clergy, homeless shelter staff, veterinarians, college and university instructors and support staff, and workers in stores that sell groceries and medicine – are eligible to begin receiving vaccines. North Carolina is also currently vaccinating educators, school personnel, child care workers, health care workers, long-term care staff and residents, and people 65 and older.

Here are three things your nonprofit can do to help ensure that people you serve get vaccinated once they are eligible:

One of the challenges in maximizing COVID vaccinations in North Carolina is the hesitancy of some North Carolinians – particularly those living in communities of color where there has been a history of abuse of vaccination for human experimentation – to receive vaccines. A new bill in the NC House of Representatives (H.B. 214) would create a new grant program through the DHHS Office of Minority Health and Health Disparities to help address vaccine hesitancy in historically marginalized communities. Community centers, long-term care facilities, rehabilitation facilities, and faith-based organizations would be eligible to receive grants of up to $10,000. The Center is working with bill sponsors to try to ensure that other nonprofits serving historically marginalized communities would also be eligible for these grants if this bill is passed, either on its own or as a part of a future COVID relief bill.

The U.S. Supreme Court will soon consider two cases challenging a California law that requires charitable nonprofits to disclose donor information to state officials. The plaintiffs argue that the California disclosure rule infringes on nonprofits’ First Amendment rights. The California law requires nonprofits to disclose to the state – but not to the public – donor information from Schedule B of Form 990. The Center has heard that some North Carolina nonprofits have been contacted by a national nonprofit that is providing misleading information about the case to try to get nonprofits to sign on to an amicus brief urging the Supreme Court to strike down the California law.

This week, the California Association of Nonprofits (CalNonprofits) posted an analysis of the case, explaining why the California law is actually safe and beneficial for nonprofits. The law helps protect the nonprofit sector’s reputation by giving the California Attorney General the tools it needs to investigate and prosecute fraud and abuse of nonprofits. The CalNonprofits analysis debunks some of the misleading claims that other organizations have used to try to convince nonprofits that the law could jeopardize donor privacy (which it would not do). CalNonprofits plans to file an amicus brief in support of the California law.

On Wednesday, the U.S. House of Representatives approved the For the People Act of 2021, a bill that would make significant changes to voting laws, campaign finance laws, and ethics rules. Several provisions in the bill would be beneficial to nonprofits and the communities they serve, including:

Although many parts of the bill have broad, bipartisan support, the For the People Act passed the House along party lines. It is unlikely it will have enough support to pass the Senate, where it would need 60 votes (out of 100 Senators) for approval.

On Wednesday, the NC House Rules Committee approved a bill (H.B. 107) that would prevent increases in unemployment insurance (UI) costs for virtually all North Carolina nonprofits this year. Two Senate committees approved an identical bill (S.114) this week. Two parts of these bills are particularly noteworthy for nonprofits:

The NC House and NC Senate are expected to vote on one or both of these bills next week.

The Center will offer two online nonprofit policy briefings this month. The first policy briefing on Monday, March 15, will provide an overview of the latest federal and state COVID-19 relief plans and the potential policy solutions that could help nonprofits during the 2021 NC legislative session. The second policy briefing on Friday, March 19, will feature a bipartisan panel of state legislators sharing insights on state policy priorities in 2021, the budget process, and how nonprofits can effectively engage with elected officials as the pandemic continues. Join us for one or both of these policy briefings.

Thank you for reading this update! Before you move on to your next email, please FORWARD this update to a few nonprofit colleagues who you feel would value this information. Let them know to read to the end for the link to sign up to receive weekly policy updates throughout the pandemic, or better yet to join the Center as a member to receive these and other regular updates, along with many more valuable resources.