Questions on Non-Filer Tool; PPP; and, Unemployment Insurance
Wednesday, April 15, 2020
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Posted by: Sabrina Hidalgo
There have been a few questions posed on the forum that perhaps a few words may be helpful?
The New IRS Non-Filer Web Tool
As you know, initially on April 2nd RCRI expressed its wariness that a member who did not file a federal income tax return Form 1040 for either 2018 or 2019; normally does not file a Form 1040; and, did not receive Social Security benefits, file a zero-return so as to obtain a stimulus payment. To do so may result in the IRS looking for Form 1040 in future years.
This wariness was expressed again on April 12th in RCRI’s announcement of the IRS new non-filer web tool. That wariness still exists today.
At the same time, in the April 12 announcement, it was also recognized this web-tool “seems to have greater advantages for so-affected members of religious institutes who otherwise would have to file a zero-return federal income tax in order to receive an Economic Impact Payment.” It has been recognized that some members, despite RCRI’s wariness, may still wish to somehow obtain a stimulus payment “for so-affected members.” The IRS web tool and April 12th announcement was discussed over the Easter weekend by RCRI staff and a well-experienced treasurer.
In it, we find the following concluding paragraph:
You will receive an e-mail from Customer Service at Free File Fillable Forms that either acknowledges you have successfully submitted your information, or that tells you there is a problem and how to correct it. Free File Fillable forms will use the information to automatically complete a Form 1040 and transmit it to the IRS to compute and send you a payment.
In the Q & A of the non-filers tool, we find the following:
- What are the qualifications to use Non-Filers: Enter Payment Info?
Anyone can use Non-Filers: Enter Payment Info who has not received Social Security, Railroad Retirement, or SSDI benefits, has not already filed a 2018 or 2019 tax return, or is not planning to file a traditional 2019 tax return because they meet minimum eligibility requirements. People who use this must have an SSN with two exceptions and not be claimed as a dependent on someone else’s return. The exceptions are: you can file with an ITIN if you are married to a member of the military, and an ATIN can be used for a qualifying dependent.
- What form will I be filling out?
This is not a new form. We are using the existing 1040 and collecting a few data elements to compute the Economic Impact Payment.
Again, due to the fast-moving nature of the legislation and the federal government’s desire to expedite relief to individuals during this pandemic, is this an example of the federal government using pre-existing forms or agencies for an additional or extraneous purpose, or utilizing a single form for a disparate group of individuals?
By way of example, the SBA is assisting in the Payroll Protection Program for the benefit of religious organizations. Further, as many are well aware and have asked, the actual PPP application fails to distinguish non-profit organizations from for-profit and other organizations in the questions regarding ownership.
As such, is the IRS “using the existing 1040” to merely compute the Economic Impact Payment while “collecting a few data elements”, or will it also be treated as the actual filing of a 2019 federal income tax return in addition to computing an Economic Impact Payment? The answer seems unclear at this point, especially as it affects members of religious institutes.
RCRI still remains wary of actually filing a Form 1040 income tax return for the few so-affected members discussed above, solely to obtain a stimulus payment check for the aforementioned reason. We hope the above is useful in guiding your decision.
Payment Protection Program
A concern has been expressed as to whether a religious organization was eligible for a PPP loan. It seems a lender bank informed a religious institute member they were not eligible for a PPP loan because of the religious nature of the organization.
Members are reminded that in a “Frequently Asked Questions” (FAQ) document released late in the evening of April 3, SBA officially clarified its position, stating “no otherwise eligible organization will be disqualified from receiving a loan because of the religious nature, religious identity, or religious speech of the organization.”
“(T)he CARES Act explicitly makes nonprofit entities eligible for the PPP program,” the FAQ continues, “and it does so without regard to whether the nonprofit entities provide secular social services.”
All of the same terms required of other employers are required of churches and religious nonprofits, the FAQ adds, noting “under these [outbreak] circumstances, the Establishment Clause does not place any additional restrictions on how faith-based organizations may use the loan proceeds received.”
It is recommended that a copy of these FAQ’s from the SBA be presented to a lending bank if it informs a member that it is not eligible for PPP on account of its religious nature or identity.
Unemployment Insurance
Members are reminded to consult RCRI’s announcement of April 6, 2020 under “Latest News.” See the section entitled “Unemployment Insurance” regarding the Pandemic Unemployment Assistance program (“PUA”).
In short, employees of religious institutes may be eligible for unemployment insurance under the PUA depending on your state. Check your local state unemployment insurance office for further information.
As always, please feel free to contact RCRI with any or continuing questions.
Easter blessings,
Christopher Fusco
RCRI
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