PAYCHECK PROTECTION PROGRAM LOANS. Ultimately, it may become necessary for the local church to apply for a loan from a different bank. The housing allowance amount, however, would be treated as salary or wages for determining whether the minister is compensated in excess of $100,000 for determining payroll costs. How much can a church receive through a PPP or EIDL loan? Under the PPP, a church is eligible to receive funds covering up to 2.5 times their average monthly payroll, with a cap of $10 million per loan. 75% of this loan must be allocated to direct payroll costs. This loan is forgivable if certain conditions are met. (he does use a housing allowance for tax purposes. Our view is the housing allowance provided by a local church to its pastor is appropriately included when calculating Payroll Costs. What if my nonprofit is affiliated with other nonprofits? Minister’s Housing Allowance Can Be Included in Payroll Costs for PPP Loans print In an FAQ just released this afternoon, the U.S. Small Business Administration (SBA) states that it has approved the inclusion of the minister’s housing allowance in payroll costs for purposes of applying for a Paycheck Protection Program (PPP) loan and seeking forgiveness of that loan. According to SBA regulations the amount of forgiveness can be up to the full amount of the loan and any accrued interest, if the borrower uses all of the loan proceeds for “forgivable purposes” and employee and compensation levels are maintained. In an FAQ released on April 24, 2020, the U.S. Small Business Administration (SBA) states that it has approved the inclusion of the minister’s housing allowance in payroll costs for purposes of applying for a Paycheck Protection Program (PPP) loan and seeking forgiveness of that loan. In the coming days, banks will have the needed information and application processes in place to apply, some as early as April 3. D. Is it true that my church won’t have to pay the loan back? How churches can apply for PPP: Churches should start by contacting their bank. Churches are employers with paychecks to protect just like businesses and other 501(c)(3)s, but they won’t have to follow the same rules, because they are, you know, churches. GuideStone believes that housing allowance should be included when considering the total average monthly payroll for determining the amount of the loan. A housing allowance paid to a clergyperson is part of his or her compensation. 4. 12. A Paycheck Protection Loan may not exceed $10 million. The COVID-19 crisis and its attending economic disruption have brought a conundrum to Baptist and other Protestant churches in the United States. Access a fillable PDF of the application by clicking here. 07 May SBA Approves the Pastoral Housing Allowance for PPP Loans. A local church will likely be eligible for this credit if it was subject to an order limiting group meetings. Column 2 should be the total Housing allowance expense paid to ordained ministers for those 4 quarters, including non-cash housing allowance for a parsonage. Clergy Housing Allowance. Is my faith-based organization disqualified from any SBA loan programs because it is affiliated with … Q1: Our church received PPP loan proceeds from our bank. Fill out the loan application for the PPP. Churches: Take the PPP money and walk. January 26, 2021 at 3:32 pm. 6 PPP Applications are Similar • Amount: Loans available up to 2.5x the average monthly Payroll costs (2019 or 2020) Payroll costs include: Cash Salary, Housing Allowance, Employer Paid Benefits Decide if this provision is right for your church. Be sure to clarify this with your SBA lender since there may be more guidance published in coming days. See the following link to the US Treasury Department’s website, Paycheck Protection Program Loans Frequently Asked Questions (as … 10. With a promissory note signed, are we OK with loaning him $7500 for … Clergy Housing Allowance. The payment officially designated as a housing allowance must be used in the year received. First, the church must only spend the loan proceeds on the costs described above. A note for churches: At this time, the program does not specifically indicate if you can include pastoral housing allowances in the loan amount or in loan forgiveness. Ultimately, it may become necessary for the local church to apply for a loan from a different bank. Example: Church “A” applies for a Paycheck Protection Loan on April 1, 2020. The amount available from the federal government to issue these loans is capped, and churches should apply as soon as possible. After weeks of uncertainty surrounding the Minister’s Housing Allowance for Paycheck Protection Program loans, the U.S. Small Business Administration (SBA) states in a Frequently Asked Questions report that it has approved the inclusion of the minister’s housing allowance in payroll costs for purposes of applying for a Paycheck Protection … Also, the amount of the housing allowance should be approved by the church board (or other leadership of the organization) and it must be in writing. Without a doubt this program will help many churches and nonprofits across our country hurting due to falling donations. The loan situation is hopefully trouble-free, but awkward situations could develop. Yes, there are many factors for pastors and church … It includes $284 billion dollars for a second round of Paycheck Protection Program (PPP) Loans for which churches and nonprofits are eligible to apply through participating banks. A1: Yes. However, during that time period, … After much political drama, the Consolidated Appropriations Act of 2021 (CAA) has been approved by Congress and signed by the President. Dear Clients and Friends, The church world is a buzz with webinars and emails about the SBA loan program called the “Paycheck Protection Program.”. Can the loan be forgiven? Provisions to Keep Churches Afloat The CARES Act, now the largest relief package in U.S. history, contains a $350 billion Paycheck Protection Program (PPP) to offer government-guaranteed, low-interest loans for small businesses, as well as for churches and nonprofits registered as 501 (c) (3)s. Religious liberties. It is a form of income to fully pay or at least allow a part of the expense to own or rent a home. The change to 24 weeks gave organizations more time to SPEND the funds, hopefully allowing for MORE forgiveness of the PPP loans. Churches: We prepare the pastoral housing allowance and other required benefit documentation to meet the complex dual status of ministers. 2 Housing for Your Pastor:Parsonage or Housing Allowance? Churches are likely eligible for the PPP and many of the other programs as long as the church has 500 employees or less. Today's blog was taken from a new episode of the StartCHURCH podcast, Beyond the Call! Just before the weekend, the SBA added four additional questions (numbers 32-35 for those keeping count) to the Paycheck Protection Program Loans Frequently Asked Questions document on the SBA CARES Act website. Loan from General Fund to Pastor. … The SBA has made it official: the minister’s housing allowance is a part of wages for purposes of the PPP Loan application. The loans are backed by the Small Business Administration (SBA) but are administered by banks. Payroll taxes and payroll providers. A housing allowance may be used for any expense relating to renting a home, purchasing a home, and maintaining a home. Secure Approval Before Applying for PPP Loan. Total Amount of Payroll costs used in PPP worksheet Column 1 of this spreadsheet should be the total wages from your 4 941's for the 4 quarters of your report. The PPP is attractive to churches because it is potentially partially or fully forgivable if certain requirements are met. A housing allowance is often a common and critical portion of income for pastors. If you received PPP #1 you are eligible to apply for PPP #2 if you meet the requirements which will … Access a fillable PDF of the application by clicking here. Our partnership continues, and we’re here to help you with your application. 11. Many homes appropriate for the minister’s needs are out of the price range for their salary. Tune in today to listen to episode 15, What Churches Need to Know About the PPP Loans, with Allan Armitt, CFO of StartCHURCH!
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