On Thursday, March 11, 2021, the President signed into law the American Rescue Plan Act of 2021 (ARPA). ARPA is a $1.9 trillion stimulus bill that includes billions of dollars for small businesses and not-for-profit organizations. Title V, Sec 5001 amended the CARES Act in relation to the Paycheck Protection Program (PPP). This included creating a new category of eligible organizations. This new category includes organizations described in any paragraph of section 501(c) of the Internal Revenue Code of 1986, other than paragraph (3), (4), (6), or (19), and exempt from tax under section 501(a) of such code. As Labor Unions and Welfare Funds are established under IRC 501(c)(5) and 501(c)(9) respectively, this law has opened the door to allow these organizations to be potentially eligible for the PPP. In addition to certifying that the “current economic uncertainty makes this loan request necessary to support the ongoing operations of the applicant”, the eligibility requirements under ARPA include:
  1. The organization must not employ more than 300 employees;
  2. The organization does not receive more than 15 percent of its receipts from lobbying activities;
  3. The lobbying activities do not comprise more than 15 percent of the total activities of the organization; and
  4. The cost of lobbying activities of the additional covered organization did not exceed $1 million during the most recent tax year (ended prior to Feb 15, 2020)
ARPA did not extend the end date of the PPP application date, which remains March 31, 2021. The American Institute of Certified Public Accountants (AICPA) has sent a letter encouraging Congress to extend this deadline by 60 days.
Please contact your Legacy representative if you have any questions.
News Flash 3/15/21