NONPROFIT COVID-19 RESOURCES
Newsletter by Hawkins Ash CPAs
In this edition
March 31, 2020

We Are Here for You

Not-for-Profit Year-End Reporting Deadlines for IRS and State Government

Navigating the Challenges of COVID-19:
What Should You Do Now?

Small Business Administration Provides Economic Injury Disaster Loan Assistance

Coronavirus Aid, Relief and Economic Security Act (CARES Act)
We Are Here for You

As we are learning how to adapt to this "new normal" during the coronavirus (COVID-19) pandemic, nonprofits that already typically operate on thin margins are now facing unprecedented challenges.

Despite these hurdles, we want you to know that we are here for you. Below are some resources available for nonprofits and guidance from our team at Hawkins Ash CPAs. We also are continuing to update our website as changes arise.
Not-for-Profit Year-End Reporting Deadlines for IRS and State Government

Most of the not-for-profit (NFP) reporting forms are outside of the April 15 deadlines that have been extended, but all can be extended except for the 990-N. Any tax payments that are due are still required at the time of filing the extension.

Annual Reporting Returns

990-N
  • Due on the 15th day of the fifth month after year-endno extensions

Form 990EZ, 990 and 990T
  • Due on the 15th day of the fifth month after year-end
  • Form 8868 can be filed for an automatic six-month extension

Wisconsin Annual Reporting ( www.wdfi.org )
  • Annual report is due 12 months after fiscal year-end

Minnesota Annual Report ( www.ag.state.mn.us )
  • Has been extended for four months for reports that are currently due between April 15, 2020, and July 15, 2020; no request for extension is necessary
  • For example, December 31, 2019, year-end normally due July 15, 2020, is now due November 16, 2020

Unrelated Business Income Tax Returns

Federal Form 990-T
  • Due on the 15th day of the fifth month after year-end
  • Form 8868 can be filed for an automatic six-month extension

WI Form 4-T
  • Due the same time as the Federal Form 990-T and if federal is extended, Wisconsin is automatically extended

MN M4NP
  • Due the same time as the Federal Form 990-T; an automatic extension of seven months is allowed by checking a box when filing the M4NP

Visit our website to learn about federal and state tax extensions for individuals and businesses.

Author: Sandy Jensen, CPA
Direct: 608.793.3126
Email: sjensen@hawkinsashcpas.com
Navigating the Challenges of COVID-19:
What Should You Do Now?

During this unprecedented time, almost all organizations and businesses are facing current challenges, from stay-at-home orders to employee layoffs. This has been a difficult time for leadership, employees and those individuals in the communities that you serve.

As the situation continues to evolve on a daily basis, it is important to remain calm. As each day seems to come with a new set of challenges, it is important to take a step back and evaluate the financial impacts this will have on your Organization. Decisions made now can help limit prolonged disruptions in fulfilling your mission. As we encounter new challenges, this is a great time for collaboration, creativity and compassion—concepts to which nonprofit organizations are not strangers.

For a majority of Organizations, financial impacts are going to be a reality. Your first step should be to put together a budgeted cash projection for the coming months to determine what your exact needs will be, taking into account potential decreases in revenues and expenses due to the impacts of COVID-19. If financial shortfalls are the reality for your organization, here are just a few recommendations on navigating those impacts:

Expenses
Look at your expenses and try and determine areas where costs could be reduced or eliminated.

For example:
  • Can you scale back on any overhead costs?

Personnel
Before resorting to employee layoffs, are there other ways you could get creative with your personnel costs to keep all individuals employed?

For example:
  • Cut back or defer retirement contributions
  • Ask employees to take a brief pay cut (note that you will still need to abide by all wages and hours laws in your state)
  • Consider intermittent employee furloughs or universal part-time hours

Fundraising
Now is not a time to stop your fundraising efforts; it is a time to get creative! While many individuals in your communities also will feel the financial impacts of COVID-19, unprecedented times like these bring out generosity and kindness in all of us. Make sure your donors know that you are not immune to the economic effects of COVID-19 and remind them of the essential impact you have on the people in your communities.

Although all in-person fundraising events have been halted, we have endless amounts of technology at our fingertips (literally) to keep these fundraising efforts going.

For example:
  • Social media platforms
  • Email
  • Direct mail
  • Phone calls
  • Video chats

Legislation
Stay up to date on the federal financial assistance packages that are being made available. The paid sick and family leave act will help organizations substantially (see additional links provided in this newsletter for more information and resources). We will keep you up to date on the various assistance packages that are evolving daily.

Local Resources
Reach out to your local resources to determine if there are grants, loans or other financial resources available.

For example:
  • Small Business Administration (SBA) disaster assistance loans (see below for details)
  • Private community foundation grants
  • Business interruption insurance
  • Local, city or county assistance
  • Your local Chamber of Commerce and United Way

Finances
Have open communication with your lenders and vendors. Many banks and credit card companies have offered deferred payment options.

During these uncertain and challenging times, it is important that you take a step back, take a deep breath and remember your mission. Nonprofit organizations are essential pieces for the communities in which we live. Strategic decision making and compassion in times of crisis will help you overcome these challenges. At Hawkins Ash CPAs, we appreciate you and are here to help you.

Author: Brittany Leonard, CPA
Direct: 608.793.3123
Email: bleonard@hawkinsashcpas.com
Small Business Administration Provides Economic Injury Disaster Loan Assistance

The U.S. Small Business Administration (SBA) is offering designated states and territories (including Wisconsin) low-interest federal disaster loans for working capital to small businesses suffering substantial economic injury as a result of the coronavirus (COVID-19). Here is some information about the Economic Injury Disaster Loans (EIDL):

  • Available to small businesses and private not-for-profits with loan amounts up to $2 million.
  • Funds can be used for debts, payroll, accounts payable and other bills that could have been paid if the disaster had not occurred.
  • We strongly suggest that you apply now. Even if you later decide you do not want to take on the loan, you can reject it at that time.
  • Note: Small businesses can apply immediately for a $10,000 emergency grant to be paid within three days. If you are later turned down for the loan, this amount does not need to be repaid.
  • This loan is applied for directly through the SBA.
Coronavirus Aid, Relief and Economic Security Act (CARES Act)

Paycheck Protection Program (PPP)

  • Available to small businesses, sole proprietors, independent contractors and not-for-profits with fewer than 500 employees.
  • Loan amount is generally capped at 2 ½ months of payroll expenses.
  • Amounts spent during the first eight weeks from loan origination may be forgiven.
  • Assumes your workforce remains consistent.
  • Funds are used for qualified expenses such as payroll, insurance, rent and mortgage interest.
  • Any unforgiven portion of the loan will have a 6-12 month payment deferral period and then be repaid over 10 years (max).
  • To apply for this loan, please contact your local financial institution.

Additional Items to Note

  • You cannot use both the PPP and EIDL (see above) loans at the same time.
  • If you get a $10,000 emergency grant and then are accepted for a PPP loan, the $10,000 grant will be subtracted from the PPP loan amount.
Current Articles and Other Resources
Paid Sick and Family Leave under the Family First Coronavirus Response Act

Jeff Dvorachek, CPA, outlines updates on the topic of paid leave for employees, as well as paid sick leave credit and child care leave credit for employers (based on the latest information from March 25, 2020).
Families First Coronavirus Response Act: Questions and Answers

The U.S. Department of Labor Wage and Hour Division defines “Paid sick leave” and “Expanded family and medical leave,” in addition to providing answers to dozens of pressing questions.
If you are currently involved in your audit process, your in-charge will be in touch with you to discuss options.

Know that we are fully equipped to serve you via phone, email and other secure online tools, such as our client portal. Please do not hesitate to reach out to your representative with any questions you may have or to find out how we can support you during this time.

In the midst of this fluid situation, we will keep you updated as we learn of new developments and legislation that might impact your Organization.
Hawkins Ash CPAs
www.HawkinsAshCPAs.com
info@hawkinsashcpas.com