Schneider Downs continues to track the evolving landscape of federal financial programs offered in the wake of the business disruption caused by the COVID-19 pandemic. On March 11, 2021, the American Rescue Plan Act (ARP Act) was signed. The ARP Act provides several revisions to increase the eligibility and add requirements for organizations under the Paycheck Protection Program (PPP).
Previously, under the CARES Act, as amended, only those organizations described under Internal Revenue Code Section 501(c) (3), (4), (6), and (19) were eligible for PPP. As amended by the ARP Act, PPP loans are available to all organizations described in any paragraph of Section 501(c) of the Internal Revenue Code of 1986.
These newly eligible entities are subject to additional eligibility criteria including:
The entity does not receive more than 15% of its receipts from lobbying activities;
The lobbying activities of the organization do not comprise more than 15% of the total activities; and
The cost of the lobbying activities of the organization did not exceed $1,000,000 during the most recent tax year that ended prior to February 15, 2020.
Also, the ARP Act increased the eligibility for all other not-for-profit organizations operating in more than one physical location. Under the ARP Act, a not-for-profit organization that employs less than 500 employees per physical location may be eligible for a PPP loan if it meets the other eligibility requirements.
The ARP Act also expanded the eligibility of internet publishing organizations to include organizations that are assigned a North American Industry Classification System code of 519130. An entity is eligible to receive a covered loan for the continued provision of news, information, content, or emergency information if it: “certifies in good faith as an Internet-only news publisher or Internet-only periodical publisher, and is engaged in the collection and distribution of local or regional and national news and information” and it meets the following criteria:
Employs no more than 500 employees per physical location; and
The loan will be used to support expenses at the component (physical location) that supports local or regional news.
Unrelated to eligibility, the ARP Act also added premiums paid in determining the credit allowed related to premium assistance for COBRA (under section 6432 of the Internal Revenue Code of 1986) to payroll costs that are eligible for forgiveness.
If you need more information or assistance regarding a PPP loan, visit our website at schneiderdowns.com/ppp, reach out to any of your contacts at Schneider Downs or contact Joel Rosenthal at [email protected].
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Material discussed is meant for informational purposes only, and it is not to be construed as investment, tax, or legal advice. Please note that individual situations can vary. Therefore, this information should be relied upon when coordinated with individual professional advice.