COVID Relief Bill for Nonprofits

On December 21, 2020, Congress passed the COVID-Related Tax Relief Act of 2020 as part of the Consolidated Appropriations Act of 2021.  The Acts provide over $900 billion in relief to individual taxpayers and businesses.  The President is expected to sign the bill into law this week. 

There are several important provisions in the bill; however, there are two specifically relevant to nonprofit organizations.

Charitable Deduction Extension

The bill extends the charitable deduction for individuals that do not itemize on their 1040.  The $300 above the line deduction for cash contributions made to a qualified organization in 2020 has been extended to 2021.  The 2021 deduction is $300 for individual returns and $600 for married filing jointly returns.  

Additional Nonprofits Eligible for PPP Loans

Included in the bill is also another round of PPP loans.  Your organization may be eligible for a second loan given certain requirements are met.  In addition, 501(c)(6) organizations (chambers of commerce, professional associations, trade associations) that were not previously eligible for a PPP loan are now eligible.  There are requirements on the amount of lobbying the 501(c)(6) organization has engaged in to be eligible.  

Contributed by: Carrie Minnich, CPA, MAcct | Director | DWD CPAs & Advisors