Payroll Protection Program, CARES Act & Families First Coronavirus Response Act Information

Find an additional list of resources at the bottom of this page.

June 8 Memorandum from UCC General Counsel – The Paycheck Protection Program Flexibility Act was signed into law on June 5. This memorandum provides a brief summary of the key changes, some of which may affect a church’s decision to apply for a PPP or how it uses the funds. The law extends certain deadlines and eases certain requirements for loan forgiveness for Paycheck Protection Program (PPP) loans borrowed under the CARES Act. United Church of Christ Local Churches and other settings should take these new deadlines and requirements into account in determining whether to apply for a PPP loan and how to use the funds once received. Download memorandum here.

SBA May 13 Updated FAQ Paycheck Protection Program Loans

May 4 – Updated Memorandum from UCC General Counsel Heather Kimmel – Updated guidance on the CARES Act. It is important to note that forgiveness of these loans is not automatic and must be applied for; borrowers will need to provide documentation on the use of the funds. Download here

May 4 – Communication from UCC General Counsel Heather Kimmel – Further questions have been raised regarding doing the analysis about whether a church can properly certify that a PPP loan is necessary. While the SBA guidance on this is slim (and ever-changing), several folks have recommended the following article by a CPA firm as one approach that a church setting can take to document that the loan was in good faith, so I am sharing it with you in case you also find it helpful. Article link

SBA May 3 updated FAQ Paycheck Protection Program Loans

SBA April 29 updated FAQ for religious organizations applying for loans under the CARES Act.

April 30 – Communication from UCC General Counsel Heather Kimmel in response to questions about SBA FAQ #31, liquidity, and necessity as it relates to the Paycheck Protection Program. Download here

April 15 – Memorandum from UCC General Counsel Heather Kimmel
Here is the latest the latest guidance from Heather Kimmel regarding unemployment for church employees. Download the memorandum here

April 3, P.M. – Updated Memorandum from UCC General Counsel Heather Kimmel
Last night the SBA issued its first guidance related to the Paycheck Protection Program. The updates are primarily related to religious liberty concerns, and forgiveness being contingent on using 75% of the proceeds for payroll and only 25% on other permitted costs like rent/mortgage/utilities. Additionally there are answers to a few questions — like who owns the church, and whether a church can include sums that it pays to independent contractors in its calculation of payroll costs. Download updated memorandum here.

April 3, 2020 – CARES Act Update for Churches from UCC General Counsel Heather Kimmel
The CARES Act was signed into law on Friday, March 27, 2020. It is a massive stimulus package introduced to combat economic damage as a result of the COVID-19 virus. The law contains several provisions of interest to churches and ministers. This memorandum addresses the question of whether churches should apply for federal funding, even if eligible. The memo also addresses some common questions about the Paycheck Protection Program and the Pandemic Unemployment Assistance Act, which are the two programs that will affect churches the most. Download this memorandum here.

March 30, 2020 – The following information is provided by Heather Kimmel, UCC General Counsel, regarding the Cares Act and the Families First Coronavirus Response Act (FFCRA).
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.