How to Take Advantage of PPP Loans and the ERTC

Paycheck Protection Program loans aren’t just for SMACNA members with a small contracting business. Any 501(c)(3) and 501(c)(6) organization with no more than 300 employees can apply for federal assistance programs to reduce the financial impact of the pandemic.

Paycheck Protection Program loans aren’t just for SMACNA members with a small contracting business. Any 501(c)(3) and 501(c)(6) organization with no more than 300 employees can apply for federal assistance programs to reduce the financial impact of the pandemic. In addition to PPP2, employers can also apply for the Employee Retention Tax Credit (ERTC). There are also other ways to maximize cash flow, with or without a PPP2 loan.

The PPP was expanded at the end of 2020 to include eligibility for 501(c)(6) groups that meet certain qualifying conditions, such as having no more than 300 employees, no more than 15 percent of receipts from lobbying activities, and lobbying costs that did not exceed $1 million during the most recent tax year ending before Feb. 15, 2020. (Contact the SBA if you need clarification on what defines “lobbying activities” and “lobbying receipts.”)

The White House announced yesterday its support of extending the Paycheck Protection Program to May 31, 2021, giving entities more time to take advantage of the program. If passed by the Senate, all eligible entities will be able to apply through a participating lender until then.

Associations and other nonprofits impacted by the pandemic should also look into ERTC eligibility, which offers substantial liquidity potential for many businesses without a loan application or loan forgiveness process. The ERTC is a refundable tax credit equal to 50 percent of payroll-related costs up to a maximum credit of $5,000 per employee for 2020 and $7,000 Per employee per quarter for the first two quarters of 2021. However, employers should be careful not to “double-dip” on wages reported as they cannot use the same wages for both PPP loan forgiveness and the ERTC.

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