Federal Assistance

Community by community, the impact of COVID-19 is variable and rapidly changing. The League of American Orchestras has been a leading voice as orchestras join advocates in the arts and nonprofit sectors nationwide seeking federal relief that will protect their substantial workforce and safeguard their essential service to communities in the wake of unprecedented closures and event cancellations. Forms of federal support that have traditionally been more limited are now expanded to offer opportunities for the nonprofit sector and workers in the gig economy, like many self-employed musicians, to find relief amidst the COVID-19 crisis. While these forms of assistance are meant to be rapidly available, more details will be needed as federal agencies sort out the fine print.

As Congress and the Administration consider new forms of federal economic assistance that may be targeted or widespread, orchestras should continue to contact elected officials to let them know of the unexpected loss of event-dependent revenue, income for musicians, and declines in charitable contributions.

Contact Your Member of Congress Today!

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Webinars and Legal Assistance

The League of American Orchestras has hosted two free webinars, providing a top-line overview of what is known about COVID-19 federal relief, along with insights into the new need for crisis management through mid- and longer-term financial planning and strategic thinking. The webinars included insights from experts at Pryor Cashman, LLP and Susan Nelson, TDC and were moderated by the League’s Heather Noonan, VP for Advocacy. The League is also offering individualized technical assistance on the COVID-19 federal relief opportunities from qualified legal experts from the Pryor Cashman law firm.   

Webinar: Your Orchestra and COVID-19 Federal Relief (April 1, 2020)

Webinar: Your Orchestra and COVID-19 Federal Relief, Part Two (April 8, 2020)

Webinar: Loan Forgiveness and the Paycheck Protection Program (June 5, 2020)

Webinar: Updates on Flexibility and Loan Forgiveness (June 29, 2020)

Legal Assistance for League Member Orchestras

 


Families First Paid Leave Provisions

The FFCRA has a central focus on COVID-related paid leave for employees, relief for employers (including nonprofit employers) that provide the paid leave, and comparable leave provisions for self-employed workers. The FFCRA’s paid leave provisions are in place for employers with fewer than 500 employees at the time leave is taken, take effect on April 1, 2020, and apply to leave taken between April 1, 2020, and December 31, 2020. A temporary non-enforcement period is in place through April 17 for employers making a good faith effort to adapt to the new rules. Exemptions may be available for employers with fewer than 50 employees. 

U.S. Department of Labor Overview of COVID-19 Topics

U.S. Department of Labor FAQ on Paid Leave Requirements

U.S. Department of Labor Overview of Employer Paid Leave Requirements

U.S. Department of Labor Updated Guidance RE: Paid Leave Due to Children Engaged in Remote Learning in Fall 2020 (August 27, 2020)

The U.S. Treasury Department is responsible for writing guidelines to detail how employers will gain access to refundable payroll tax credits equal to paid leave provided, and how similar paid leave relief will be accessible to self-employed individuals.

U.S. Department of Treasury Overview of Employer Paid Leave Relief and Self-Employed Relief Provisions

League Update on COVID-19 Paid Leave and Employer Relief Provisions (March 21,2020)

 


Pandemic Unemployment Benefits, Including Self-Employed individuals 

Unemployment Benefits Guidance was expanded by the federal government on March 12, giving states the flexibility to expand their unemployment benefits coverage to include COVID-19 related worker displacement. Unemployment benefits will be further expanded to provide an additional $600 per week above the amount allowed under state unemployment benefits, for four months. New relief will be available for workers not eligible for state unemployment benefits, including self-employed individuals who are unable to work due to a number of COVID-related reasons, including "the individual's place of employment is closed as a direct result of the COVID-19 public health emergency." Very many musicians and arts workers who otherwise do not have access to state unemployment benefits may find relief through this provision. Unemployment benefits will be available for a total of 39 weeks, and covered dates of unemployment are from January 27, 2020 through December 31, 2020.

U.S. Department of Labor Issues PUA Guidance to States (April 5, 2020)

Future of Music Coalition Tracks State-by-State Readiness to Accept Unemployment Claims for Self-Employed Workers

Find Your State Department of Labor

 


SBA Economic Injury Disaster Relief and Loan Advance

The SBA's Economic Injury Disaster Loan Program has received additional funding to provide disaster relief loans, related to COVID-19, with eligibility for nonprofit organizations and self-employed individuals. The CARES act adds rapid processing of forgivable loan advances for up to $10,000 in emergency funds. The SBA has informed the League that, as of March 24, 2020, all states are in the process of being granted eligibility, and that all interested loan applicants should originate an application now. Keep in mind that multiple forms of SBA relief may not be used for the same purpose. Guidelines should spell out how the SBA-backed forgivable paycheck protection loans approved in the third relief package will relate to Economic Injury Disaster Loans.

SBA Small Business Guidance and Loan Resources

Background Information on the SBA Economic Injury Disaster Loans

Direct Link to Apply Online (New streamlined process as of March 30, 2020) 

 


Paycheck Protection Program and Loan Forgiveness

Under the CARES Act, organizations, including 501(c)(3) nonprofits, and self-employed individuals have access to Paycheck Protection Program (PPP) forgivable loans, intended to provide rapid relief that will keep workers on the payroll and help self-employed workers. Loans are provided by local lending institutions that are authorized by the Small Business Administration (SBA). Eligible organizations are subject to a size cap of up to 500 employees (counting individuals employed on a full-time, part-time, or other basis). The maximum loan amount is $10 million, and equal to 250% of average monthly payroll for the 12 months beginning February 15, 2019. Seasonal employers have the option of calculating average monthly payroll over the period of March 1, 2019 to June 30, 2019, or May 1, 2019 and September 15, 2019.

On the question of calculating the 500 employee threshold, preliminary U.S. Department of Treasury guidelines to borrowers, referred to the following SBA calculation. “This is the average number of people employed for each pay period over the business’s latest 12 calendar months. Any person on the payroll must be included as one employee regardless of hours worked or temporary status. The number of employees of a concern in business less than 12 months is the average for each pay period that it has been in business.”

The Paycheck Protection Program Flexibility Act, signed into law on June 5, established that loans may cover expenses incurred beginning February 15, 2020 and ending on December 31, 2020. The loans originally had a maturity of 2 years, which is now expanded to up to five years, an interest rate of 1%, and payments are now deferred for 10 months. Eligible uses of the loans include payroll costs (including salary, wages, compensation, leave, severance, health care benefits, insurance premiums, retirement benefits, and state and local taxes), rent, utilities, and mortgage interest payments.

Guidelines made public on April 2, indicate that, “independent contractors have the ability to apply for a PPP loan on their own so they do not count for purposes of a borrower’s PPP loan calculation.” The Treasury issued guidelines on April 20 for self-employed applicants outlining the process for calculating maximum loan amounts and detailing further eligibility requirements.

Applicants may apply to their lender for loan forgiveness. The borrower will be eligible for loan forgiveness equal to the amount of allowable costs spent by the borrower during an 8-week or 24-week period after the origination date of the loan. The portion of the loan that can be forgiven will be reduced by an amount related to positions that have been eliminated and wages that have been reduced, unless those positions and wages are restored. New policies in the PPP Flexibility Act exempt borrowers from the proportional reduction of loan forgiveness related to retained full-time-equivalent positions in cases in which the borrower is unable to return to the same level of business activity due to compliance with federal requirements or guidance related to COVID-19. The Small Business Administration has released the Paycheck Protection Program loan forgiveness application and instructions,  an EZ version, and a streamlined process for loans of $50,000 or less, linked below.

Note that the application opportunity for obtaining a PPP loan expired on August 8, 2020.

Interim Treasury Regulations for PPP, Including Q & A (April 15, 2020)
Interim Final Rule for Seasonal Employers (April 28, 2020)
Interim Final Rule for Self-Employed Applicants (April 20, 2020)
Interim Treasury Regulations for PPP Loan Forgiveness (May 28, 2020)
Interim SBA Regulations for PPP Loan Review (May 28, 2020)

Interim SBA Regulations Implementing PPP Flexibility Act (June 12, 2020)
Interim SBA Regulations Updating Previous Regulations (June 17, 2020)
U.S. Treasury Guidelines for Refinancing EIDL Loans with PPP Loan Proceeds (June 19, 2020)
Interim SBA Regulations Updating Loan Forgiveness Guidance and Loan Review Procedures (June 22, 2020)
SBA Frequently Asked Questions on Paycheck Protection Program Loan Forgiveness (August 4, 2020)

Paycheck Protection Program Frequently Asked Questions (Continuously Updated)

Find an Eligible Lender
Loan Application 
Loan Forgiveness Application and Instructions (Updated June 16, 2020)
EZ Loan Forgiveness Application and Instructions (June 16, 2020)

Forgiveness Application and Instructions for Loans of $50,000 or Less (October 8, 2020)

SBA Payroll Protection Program Overview
U.S. Department of Treasury Assistance for Small Businesses
SBA Releases Report and Data on PPP Loans

League Comments on Interim PPP Guidelines (May 15, 2020)
League Joins Nonprofit Comments on PPP Flexibility Provisions (June 17, 2020)
League Paycheck Protection Program Webinars and Legal Consultations

 


Employee Retention Credits 

Employers that do not make use of the forgivable Payroll Protection Program loans may be eligible for a quarterly refundable payroll tax credit for 50% of wages paid by employers to employees during the COVID-19 crisis, applied to the first $10,000 in compensation per employee (resulting in a credit of up to $5,000). The extent of the credit and eligibility requirements vary depending on whether the employer has more or less than 100 employees.

Background: Employee Retention Tax Credit

Internal Revenue Service Employee Retention Credit FAQs

Advance Payment of Employer Credits Due to COVID-19

Penalty Relief for Failure to File Employment Taxes

 


Industry Stabilization Fund Loans

The CARES Act authorizes the Federal Reserve and the Treasury to create a “mid-size loan” program that may be available to nonprofits with 500 or more employees that commit to restoring 90% or more of their workforce within four months of the end of the national public health emergency. Additional requirements will apply to future workforce conditions--some of them related to collective bargaining agreements--and will merit careful consideration. Loans would be available at an interest rate of 2% or less, and payments would not be required for the first six months. The CARES Act also provides resources for a “Main Street Lending” program, giving broad authority to the Federal Reserve to set the terms for eligibility. As the initial draft of the Main Street program does not include eligibility for nonprofits, the League and our partners in the nonprofit sector are calling for immediate access for 501(c)(3) organizations. The Federal Reserve and Treasury are continuing to write guidelines for loan administration.

Federal Reserve Announces Draft Nonprofit Main Street Lending Guidelines (June 15, 2020)

League of American Orchestras Comments on Nonprofit Main Street Lending Guidelines (June 22, 2020)

Federal Reserve Announces Draft Main Street Lending Guidelines (April 9, 2020)

Main Street Lending Description (April 9, 2020)

League of American Orchestras Comments on Main Street Lending Guidelines (April 16, 2020)

 


Relief for Nonprofits Self-Insuring Unemployment Benefits 

Many orchestras are among nonprofits that self-insure unemployment benefits rather than pay state unemployment taxes. Under the CARES Act, the federal government makes payments to states to reduce nonprofit liability to 50% of the costs they incur through December 31, 2020 to pay unemployment benefits. Original guidance from the U.S. Department of Labor indicated that states must first bill nonprofits for 100% of the costs, payment must be made to the states by nonprofits, and only then would the 50% reimbursement be issued to the nonprofit by the state. On August 3, the "Protecting Nonprofits from Catastrophic Cash Flow Strain Act" (S. 4209) was signed into law, requiring states to only bill nonprofits for 50% of liability. This legislation is one of many requests the League and the larger nonprofit community had been urging Congress to pass, in order to ease the burden of unemployment compensation costs for self-insured nonprofits. While eliminating the requirement for nonprofits to pay 100 percent upfront is a partial victory, advocates continue to make the case for federal relief to cover 100 percent of costs.  

DOL Issues Unemployment Insurance Letter to States (April 27, 2020)

DOL Issues Letter to States Implementing S. 4209 (August 12, 2020)

 


International Artist Visas

Orchestras in communities of all sizes frequently engage international guest artists. In the wake of COVID-19, policy solutions are needed as arts organizations and global artists pivot to reschedule planned performances. The League and arts sector partners are calling on U.S. Citizenship and Immigration Services and the U.S. Department of State to implement immediate policy solutions that will support the future of international cultural activity. The League hosts www.artistsfromabroad.org, a complete guide to artist visa procedures, where we are posting the latest news on artist visa policies.

Latest News from Artists from Abroad

League and Arts Sector Call for Artist Visa Solutions

 


New Charitable Giving Incentives 

Building on years of advocacy by orchestras in partnership with the broader nonprofit sector, a new universal charitable deduction is available, allowing the growing number of taxpayers who do not itemize their returns to receive a tax deduction of up to $300 for cash charitable donations to 501(c)(3) nonprofit organizations during calendar year 2020. For taxpayers that itemize returns, the limit on the total percentage of Adjusted Gross Income (AGI) eligible for the charitable deduction has been lifted. The limit on corporate contributions has been lifted to 25%. The Congressional Joint Committee on Taxation issued a report on CARES Act provisions specifying that the new non-itemizer deduction’s $300 cap applies to each “tax filing unit,” which means the $300 limitation applies per tax return, regardless whether filed individually, or jointly by a couple.

Joint Committee on Taxation Report on CARES Act Provisions (April 23, 2020)

 


National Endowment for the Arts Funding 

The Coronavirus Aid, Relief, and Economic Security Act (CARES) included $75 million in funding for the National Endowment for the Arts to administer for COVID-19 assistance. Of the total, 40% of funding is being administered in partnership with state arts agencies, and the remaining resources have been delivered through direct one-time grants to eligible nonprofit arts organizations across the country to help these entities and their employees endure the economic hardships caused by the forced closure of their operations due to the spread of COVID-19. 

On July 1, 2020, the NEA announced federal grants of $50,000 each to support personnel and facilities costs for 64 orchestras nationwide in response to the COVID-19 pandemic. The Endowment’s grant announcement describes the broad distribution of awards among small, medium, and large organizations, and across locations that are urban, rural, and in-between. Out of more than 3,100 eligible applications, available funding supports 855 grants. 

In addition, the NEA has announced flexibility for current grantees and FY21 applicants:

NEA CARES Act Grants Announced (July 1, 2020)

NEA Grants for Arts Projects Guidelines: Updated FAQ for FY21 (June 19, 2020)

NEA application guidelines for CARES Act grants (April 8, 2020)

NEA CARES Act Guidelines: FAQ 

NEA FAQ for Applicants and Current Grantees

NEA to Distribute $75 million in Relief Aid (March 27, 2020)

Statement from Arts Endowment Chairman Mary Anne Carter

 


Background

 

Relief Package #1: Coronavirus Preparedness and Response Supplemental Appropriations Act (signed into law 3/6/2020)

Relief Package #2: Families First Coronavirus Response Act (FFCRA) (signed into law 3/18/20) 

Relief Package #3: Coronavirus Aid, Relief, and Economic Security (CARES) (signed into law 3/27/2020)

CARES Act Full Text

Senate Section-by-Section Overview of Key Provisions

League of American Orchestras CARES Act Overview (March 26, 2020)

League CARES Act Orchestra Question Portal

Senate Summary of Key CARES Act Provisions

National Council of Nonprofits CARES Act Overview

Independent Sector CARES Act Guide for Nonprofit Organizations

Small Business Owner’s Guide to the CARES Act – U.S. Senate