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The American Rescue Plan Act expands PPP eligibility to additional nonprofits

Mar 25, 2021

The American Rescue Plan Act of 2021 (ARPA) has allocated an additional $7.25 billion of funding to the Paycheck Protection Program (PPP) and expanded PPP eligibility to additional nonprofits.

The ARPA created a new category referenced as “additional covered nonprofit entities,” which includes nonprofits listed in Section 501(c) of the IRC  other than 501(c)(3)s, 501(c)(4)s, 501(c)(6)s and 501(c)(19)s.

The additional covered nonprofit entities may receive an initial PPP loan if they meet the following:

  • The organization must not employ more than 300 employees;
  • The organization does not receive more than 15% of receipts from lobbying;
  • The lobbying activities do not comprise more than 15% of total activities; and
  • The cost of lobbying activities of the organization did not exceed $1,000,000 during the most recent tax year that ended prior to February 15, 2020.

The ARPA also makes additional covered nonprofit entities eligible for a second draw PPP loan (also called PPP2), provided the entity had a 25% reduction in gross receipts.

Currently, the PPP program is set to expire on March 31, 2021. However, an extension of the program has been proposed. 

Additionally, the modifications of the PPP by the ARPA allow for larger organizations to be eligible for the funding as a result of revising the headcount to a “per physical location of the entity or organization” rather than total employee count. 501(c)(3)s and veteran’s organizations that employ not more than 500 per physical location are eligible for the PPP program. 501(c)(6)s, domestic marketing organizations and “additional covered nonprofit entities” that employ not more than 300 employees per physical location are eligible for the PPP program.

Wipfli can help with PPP

If you need assistance determining your PPP eligibility, applying for a PPP loan or obtaining PPP loan forgiveness, contact Wipfli. Click here to learn more about how we assist with PPP.

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Author(s)

Rachel Most, CPA
Senior Manager
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