The FAQs: How Biden’s Stimulus Bill Affects Churches and Individuals – Joe Carter

What just happened?

On Thursday, Congress passed President Biden’s American Rescue Plan Act of 2021. The $1.9 trillion, 628-page bill is the largest of the three stimulus and relief bills delivered by Congress in response to the COVID-19 pandemic.

In both the House and Senate, all Democrats voted to approve the legislation while all Republicans voted in opposition.

How does this legislation affect individuals?

As with the two previous stimulus bills, the most noticeable effect for most Americans will be a rebate on their taxes that will come in the form of a direct payment.

Individuals who earn $75,000 in adjusted gross income or less would receive direct payments of $1,400 each, with married couples earning up to $150,000 receiving $2,800, plus $1,400 per dependent. The payment would scale down by income, with partial payments for individuals phasing out entirely at $80,000 for singles and $160,000 for married couples.

For families with children, the measure increases the amount of the child tax credit to $3,600 per child under 6 and $3,000 per child between the ages of 6 and 18. This is an increase from the current maximum benefit of $2,000 per child. It also expands the ages of eligible children, which was previously capped at age 17.

The credit will be issued in the form of a monthly payment of up to $300 per child. Payments are expected to begin in July. To benefit low-income families, the credit has been made tax refundable, which means that families that do not have an income will also receive the money.

The child tax credit begins to phase out for heads of household making more than $112,500 annually or couples earning more than $150,000 a year. This calculator will estimate the amount you’ll receive.

Individual workers who have been fired or furloughed (placed on temporary leave due to special needs of a company or employer) would qualify for enhanced benefits of $300 per week, on top of what state unemployment programs pay, through September 6. (State unemployment programs pay, on average, $385 weekly to unemployed workers. With the added benefits, the average unemployed worker would receive about $685 per week.) The unemployed can also receive a 100 percent subsidy of COBRA health insurance premiums so they can remain on their employers’ health plans at no cost through the end of September.

The legislation also provides more than $30 billion is rental assistance to help low-income households assist the homeless. An additional $10 billion for homeowners is allocated for homeowners struggling with mortgage payments and other housing costs  due to the pandemic.

How does this legislation affect churches and small nonprofits?

The bill provides an additional $7.25 billion in funding for the Paycheck Protection Program (PPP), which provides forgivable loans to qualified businesses and nonprofits, including churches.

Churches, nonprofits, and Christian schools that are 501(c)3 (as well as most small businesses) with fewer than 300 employees and have seen drops of at least 25 percent of their revenue during the first, second, or third quarter of 2020 will be eligible for a second loan from the loan guarantees program of the Small Business Administration (SBA). The maximum amount of the loan is capped at $2 million. (The original PPP had a 500-employee threshold and $10 million maximum loan.)

The allowable uses for such loans still include employee salaries, insurance premiums, mortgage payments, payroll support (including paid sick or medical leave), and other debt obligations, but also include a broader range of pandemic-related expenses, such as for cloud-computing software and protective equipment for employees.

For almost all churches, the loan amount they can receive will be equal to their total average monthly payroll costs for the 12 months before the pandemic multiplied by 2.5. For example, a church with an average monthly payroll cost of $50,000 would be eligible for a loan of $125,000.

The loan requires a good-faith certification that the funds will be used to support continuing operations, retain workers, or maintain payroll or make mortgage, lease, and utility payments. The loan is forgivable (i.e., doesn’t require repayment) if the church employed the same number of people (or more) during the loan period as in 2019. Funds that are not forgiven have a loan maturity of two years, and loan payments under this program are not due for six months. No fees are included for the loan, and no collateral or personal guarantees will be required.

Since the loan comes from the SBA, most churches will want to contact the bank they currently use for information on how to apply for this program.

See also: Should Churches Apply for SBA-Backed Loans?

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