The CARES Act was signed into law last week. Its applicability to clergy who are typically exempt from FMLA and FLSA regulations is still being interpreted. There are provisions of the CARES Act that cover self-employed individuals and independent contractors. Here is guidance from the Office of the General Counsel regarding the CARES Act.

The CARES Act includes the Paycheck Protection Loan Program, providing funding to small businesses and nonprofit organizations (under 500 employees) to cover up to 8 weeks of payroll and related costs, with such loan to be entirely forgiven if an employer maintains all of its employees and salaries during the period of time commencing February 15, 2020 through June 30, 2020. Loan proceeds may be used for payroll costs, employee salaries (with some exceptions for salaries in excess of 100k/year), commissions, costs related to group health care benefits (including sick, medical or family leave and insurance premiums), interest payments on mortgage obligations or other debt obligations incurred prior to February 15, 2020, rent and utilities. Under the language of the Act, churches and religious organizations are not excluded, and according to at least one Senator, churches may participate in this program. To qualify for forgiveness, employers must retain employees through a specified period of time and a few options are provided to the borrower as to how to calculate employees during that time period. There are also provisions relating to payroll tax delay and payroll tax credits for retaining employees if the business has closed due to COVID-19, but the credit will not apply to wages paid to clergy in exercise of their ministerial duties. Other loan programs are available to larger businesses (over 500 employees). This program is administered by the Small Business Administration (SBA) and more information can be found at sba.gov.

The CARES Act also includes Pandemic Unemployment Assistance. This extends coverage to workers who are self-employed, seeking part-time employment (if permitted under state law), do not have sufficient work history, or otherwise would not qualify for regular unemployment under state or federal law and become unemployed or cannot find work due to COVID-19. This includes workers laid off from churches and religious institutions who may not be eligible under the state’s program. Please see the attached CARES Act Unemployment Insurance Explainer, stating this. Churches which may normally be exempt from state unemployment requirements are covered under the CARES Act, but we do not know how States will administer this for those unemployed church workers. It is not clear how ministers will be treated under this program. Workers will only be eligible for PUA if they are unemployed for specified reasons relating to COVID-19. Unemployment will be administered by each state.

Church Law & Tax, a respected publication on legal and tax issues for churches, is holding a webinar on April 2 on the CARES Act. I recommend registering for this webinar to get a unique church-focused perspective on this law.

The National Council of Nonprofits is also holding a webinar on both the FFCRA and the CARES Act. Register here.

Charity provision - There is a new provision that provides an above-the-line deduction for charitable contributions, plus, the limits on charitable contributions are changed. Another explanation of the larger tax implications for individuals and business lives here.

To incentivize charitable contributions, the CARES Act provides an above-the-line deduction for “qualified charitable contributions” up to $300 for individuals who do not itemize deductions. A “qualified charitable contribution” is a charitable contribution that is made in cash to a charitable organization that is not a supporting organization, Donor Advised Fund or a contribution carryover from a prior year. The CARES Act also increases the income limitations on charitable deductions by suspending the 50% adjusted gross income (AGI) limitation for 2020. Thus, individuals may deduct qualified contributions in 2020 up to 100% of their AGI. Any excess qualified contributions are carried forward to future years in the same manner as other charitable contribution carryovers.

SWC messaging about donating all of some of the FFCRA checks about to be received:

Friends, for some of us, the coming stimulus checks will be just enough to bridge the gap. For some of us, well, we really don’t need the stimulus check. If you can get by without it, consider sharing all or part of your check with people who need more than the $1200, way more, just to break even. There are lots of ways to do that. Pay your barber or hairdresser for a virtual haircut. Ask the manager at your regular coffee shop or restaurant to pass along your really generous tip to the servers laid off. Or give your local church your stimulus ‘extra’ to start a COVID-19 Relief Fund to ease the burden of families who already struggled to make ends meet before one of them lost hours or their entire job. Your generosity can turn a sunset into a sunrise.

Cornerstone Fund is enrolling all loan holders in a deferment program. You may opt out. If you borrowed from Cornerstone Fund please consider the program’s details here.

The UCCIB (insurance Board) sent out information about property insurance and COVID-19 loss coverage last week. If you did not receive that information from them or from this office, please let Bill Lyons know. Please be sure that while your building is not in use someone is checking the property regularly. Water damage is the most frequent and costly claim in the UCCIB system. Please take extra care of plumbing concerns proactively. Regular maintenance is the most effective way to lower insurance premiums in the UCCIB system.

Payments to the Southwest Conference may continue as usual. We are receiving mail regularly and processing your OCWM contributions.

Payments to the Pension Board may be made through ACH transfers. You may contact the Pension Board or the SWC office for ACH instructions.

Christopher Schouten, a member of Black Mountain UCC and a senior-level technology consultant is offering his assistance to churches trying to navigate new platforms and online presence.

We are part of the Emergency Management network in our respective states. For the reports now being collected, we need to know how the church buildings in our conference are being used by community groups. If your church has a food ministry to the community, food pantry/bank, hosts blood mobiles/drives, water stations, heat relief centers, emergency shelter, IHELP, etc. please reply to Phil Shea with details.

Finally, for your inspiration in these days of forced innovation and imposed limitations, I offer this inspiring video for your consideration.