ECFA Says CARES 2.0 Should Address These Seven Issues
Less than two weeks ago, Congress passed the CARES Act to procure $2.2 trillion in emergency relief to those impacted by the COVID-19 pandemic. The massive stimulus package provides cash to taxpayers, grants to small businesses and nonprofits, support for healthcare, and aid for larger businesses.
Now, Congress is considering additional relief. The new bill, labeled CARES 2.0, is being pushed by Democrats with House Speaker Nancy Pelosi (D-Md.) already planning beyond the next relief package and House Minority Leader Kevin McCarthy (R-Calif.) saying a new stimulus bill is “not appropriate at this time” until the current CARES Act plays out. Still, the White House has indicated it’s open to another coronavirus package, according to CNN.
The Evangelical Council for Financial Accountability (ECFA) believes that another relief package could be helpful—but for CARES 2.0 to be effective, it must address seven issues lacking in the original bill.
Perhaps most importantly, ECFA recommends increasing above-the-line charitable deductions. The CARES Act caps them at $300, which is too low, ECFA says. While it may help those already planning to give, it is little incentive for donors to make larger donations.
Sen. James Lankford (R-Okla.) offered an amendment to the CARES Act earlier in March that would have increased above-the-line deductions to one-third the standard deduction—$4,000 for an individual filer—for the rest of 2020, but it wasn’t included in the original relief package.
“If Congress enacts only one of these seven recommendations, this would be one of their most important steps,” ECFA said.
Second, Congress should extend the tax deduction provisions beyond 2020, ECFA says. The CARES Act relaxes limitations on tax credits for major donations by increasing the gross adjusted income from 60 percent to 100 percent for individuals, but only through the end of this year. The above-the-line deduction provision is also limited to 2020.
“Continuing these important incentives would encourage all Americans to give more as communities work through the after-effects of the pandemic and address continued needs,” ECFA says.
Third, the CARES Act currently gives 50 percent reimbursement of federal unemployment insurance for self-funded nonprofits. ECFA says increasing that to 100 percent would be much more helpful for nonprofits.
Fourth, ECFA is recommending that taxpayers who make charitable donations between March 13, 2020, and July 15, 2020, be allowed to claim those gifts on their 2019 taxes. “This should be applicable to itemized and above-the-line deductions,” ECFA says.
Fifth, donors should be allowed to deduct gifts made to donor-advised funds under the temporary suspension of the gross adjusted income limit.
Sixth, ECFA would like to see the payroll protection program expanded to spread a wider net for nonprofits by modifying the current 500-employee cap and providing incentives to private lenders to process applications for nonprofits.
Lastly, ECFA agrees the $349 billion limit for the Payroll Protection Program is not enough. On top of CARES 2.0, the White House has requested another $250 billion for the PPP after banks were overwhelmed by demand and technical issues stalled progress in providing the SBA loans. Still, SBA spokeswoman Jennifer Kelly said in a statement that they are processing and approving “billions of dollars of loans per hour,” according to NBC News.
Pelosi’s CARES 2.0 could include more direct payments to taxpayers, including young adults and college students who are included in their parents’ taxes, an extension on unemployment provisions, aid for rural areas, and more, according to Vox. Congress could take up the bill later this month.