Information on Coronavirus Aid, Relief, and Economic Security Act (CARES Act)

From the Alliance of Artists Communities

On March 27, 2020, the $2 trillion Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was signed into law. The historic bill includes relief programs that are especially relevant to arts organizations and practitioners, including forgivable loans, extended unemployment benefits and charitable giving incentives. While full details around how to apply for many of these funds are not yet available, TN Arts will post updates as soon as we have them. Below are some key components of the bill.

  • Paycheck Protection COVID-19 relief loans, backed by the Small Business Administration. Organizations, including 501(c)(3) nonprofits, will have access to forgivable loans, through a streamlined application process intended to provide rapid relief that will keep workers on the payroll and help self-employed workers. Eligible uses of the loans include payroll costs (including salary, wages, compensation, leave, severance, health care benefits, insurance premiums, retirement benefits, and state and local taxes), rent, utilities, and mortgage interest payments. As the Nonprofit Quarterly explains, “follow the rules carefully, and the loans will be forgiven in whole or in part … Still, the SBA has until April 11 to announce its guidance, so it will take a little while before employers can apply for these loans.”
  • Employee retention credits may be available to employers that do not make use of the forgivable SBA Paycheck Protection loans. Employers may be eligible for a quarterly refundable payroll tax credit for 50% of wages paid by employers to employees during the COVID-19 crisis, applied to the first $10,000 in compensation per employee.
  • Pandemic unemployment assistance. Unemployment benefits will be expanded to provide an additional $600 per week above the amount allowed under state unemployment benefits, for four months. Many artists and arts workers who otherwise do not have access to state unemployment benefits may find relief through this provision.
  • An “above-the-line” or universal charitable giving incentive for contributions made in 2020 of up to $300. This provision will now allow all non-itemizer taxpayers (nearly 90% of all taxpayers) to deduct charitable contributions from their tax returns, an incentive previously unavailable to them.

This Thursday, April 2nd at 2pm ET, Independent Sector will offer a free webinar on How to Apply for Nonprofit Relief Funds.

NEA Announces Additional 75 Million in Funding will be Distributed as Part of CARES Act

With the passage of the CARES Act, the National Endowment for the Arts will be distributing $75 million in additional funding. These awards will support nonprofit arts organizations across the country to help programs survive the forced closure of their operations in response to the spread of COVID-19. Grants can be applied directly to general operating expenses, a departure from the Arts Endowment’s project-based funding.

In terms of distribution, 40 percent of new funds will be awarded to state and regional arts organizations, and 60 percent to be awarded directly to applicant organizations. Details regarding timing and the application process are being finalized and will be announced on in the coming days. AAC is following developments and will keep our network posted.