Are you looking for more information to navigate evolving Federal and state guidelines and relief legislation on operations for your museum? Watch a free webinar recorded on February 2 by AAM in partnership with Raffa – Marcum’s Nonprofit & Social Sector Group, to learn from Marcum’s nonprofit experts about updates to COVID-19 relief legislation, PPP second draw, Shuttered Venue Operators Grants, eligibility, forgiveness, which opportunities to pursue, and more. Recording and slides available here. (Note that if you did not register for the event you will need to complete a form to view the recording and slides.)
With such great interest in this topic, Marcum created a Q&A document to help address the webinar attendees’ inquiries and answered with information available at present.
Paycheck Protection Program (PPP) Forgivable Loans
If you’re still considering applying for either a First or Second Draw Paycheck Protection Program Loan, there are still funds available, but you must act soon. SBA reports that more than 1.29 million loans have already been approved, totaling $100.9 billion.
You do not need to submit your Forgiveness Application for last year’s PPP before you apply for a Second Draw this year. However, you do need to certify that you used the funds properly and that you incurred a reduction in gross receipts of at least 25% in any one quarter’s comparison between 2019 and 2020. Do not apply for a PPP if you plan to apply for a Shuttered Venue Operators Grant.
- Form 2483- First Draw Borrower Application and Top-line Overview
- Form 2483-SD – Second Draw Borrower Application and Top-line Overview
Future Legislation: Congress is expected to recommend appropriating an additional $7.25 billion in PPP funding in current legislation.
Shuttered Venue Operators (SVO) Grants
**NEW – SBA Issues Shuttered Venues FAQ: On Jan. 27, and in subsequent updates, the U.S. Small Business Administration issued an FAQ about the Shuttered Venue Operators Grant (SVOG) program, Section 324 of the Economic Aid to Hard-Hit Small Businesses, Nonprofits and Venues Act (Economic Aid Act) signed into law on Dec. 27, 2020, which includes answers to frequently asked questions about the program relevant for museums. The SBA noted that the FAQ will be updated as new information comes available and additional program details are finalized. The FAQ includes information about eligibility, definitions, forthcoming application, use of funds, business size/employees, revenue and other issues. SBA has still not opened up the new SVO grants portal. The demand is very high for this program with only $15 billion available. Here are some things you can do to get ready to apply as soon as possible, regardless of which Priority Category that you may fit into:
- If you or your organization does not already have a Dunn and Bradstreet DUNS Number, get one.
- Use your DUNS number to register in the federal government’s System for Award Management (SAM). You can’t simply use a Taxpayer or Employer ID Number to apply for an SVO grant. (Note: It could take up to two weeks to finalize a SAM registration.)
- Gather documents that demonstrate your number of employees and monthly revenues so you can calculate the average number of qualifying employees you had over the prior 12 months.
- Determine your gross earned revenue losses. It looks like SBA is going to use the Gross Earned Revenue definition to determine Priority Eligibility, but it’s not confirmed yet.
- Determine the extent of gross earned revenue loss you experienced between 2019 and 2020 on a quarterly basis.
- Make PDFs of additional information such as floor plans, contract copies and other evidence that will be needed to apply for an SVO grant.
- Sign up for a regional mailing list and webinar in your area and develop a direct relationship.
- Ask the SBA specific questions about SVO eligibility by e-mailing SVOGrant@sba.gov.
SVOG Resources to Review:
- SBA’s Frequently Asked Questions on SVO Grants updated 2-12-21
- Proskauer law firm’s excellent analysis of the Shuttered Venue Operators Grants
Targeted EIDL Advances
Advance funds of up to $10,000 will be available to only applicants located in low-income communities who previously received an EIDL Advance for less than $10,000, or those who applied but received no funds due to lack of available program funding. Eligible applicants do not need to take any action at this time. Applicants will be contacted directly by SBA via email and they will first reach out to EIDL applications that already received a partial EIDL Advance (between $1,000 – $9,000). Applicants will need to prove at least a 30% loss in gross receipts during any 8-week period comparing 2019 and 2020.
Future Legislation: Congress is expected to recommend appropriating an additional $15 billion in Targeted EIDL Advance funding in current legislation.
Congress is expected to recommend appropriating an additional $1.25 billion in SVO funding in the current $15 billion legislation, which includes museums.
Institute of Museum and Library Services (IMLS) COVID Relief
Congress is expected to recommend appropriating an additional $200 million for IMLS to support states’ efforts to expand digital network access, purchase internet accessible devices, and provide technical support services to address digital inclusion efforts and related technical support in response to the pandemic.
National Endowment for the Arts (NEA) COVID Relief
Congress is expected to recommend appropriating an additional $135 million each to the NEA and NEH in supplemental COVID-19 economic relief grants in current 2021 legislation.
Pandemic Unemployment Assistance
Congress is expected to recommend extending temporary federal unemployment benefits from March 15, 2021 to August 29, 2021. The current legislation would also increase the weekly federal supplemental benefit from $300 to $400.
Direct Economic Stimulus Checks
Congress is expected to recommend providing an additional $1,400 per taxpayer, phasing out at a 2019 Adjusted Gross Income of $75,000. Current legislation also recommends significantly expanding the Child Tax Credit to $3,000 per child ($3,600 for children under 6), which can be fully refundable and advanceable.
Federal Tax Income Questions & Answers
- PPP funds should not be included in your taxable income.
- PPP covered expenses can still be deducted on your tax return.
- IRS direct stimulus checks should not be included in your taxable income.
- EIDL Advances should not be included in your taxable income.
- EIDL Loans are debt that must be repaid. They should not be included in your taxable income.
- CARES Economic Relief Funds that State and Local Governments re-granted to individuals and businesses should be included in your taxable income according to the IRS.
- State and Federal Pandemic Unemployment Assistance should be included in your taxable income.
- Employee Retention Credits cannot be taken on that portion of employee wages that were covered with a PPP forgivable loan.
- It’s not confirmed yet, but similar to PPP, it appears SVO grants will not be included in your taxable income, but your covered expenses can still be deducted.
See AAM’s Finding financial relief and support (for individuals and institutions) for additional detailed information and resources.
Thanks to Marcum and Americans for the Arts for providing much of this critical information.