With Senate passage of legislation to help nonprofit groups remain financially viable during the COVID-19 pandemic, U.S. Senator Cindy Hyde-Smith (R-Miss.) today encouraged consideration and passage of the bill by the House of Representatives.

Prior to the Fourth of July break, the Senate passed the Protecting Nonprofits from Catastrophic Cash Flow Strain Act (S.4209).  Hyde-Smith is an original cosponsor of this measure that would help ensure nonprofits, state and local governments, and federally recognized tribes aren’t forced to dedicate limited funds to cover unemployment insurance costs and then wait for federal reimbursements.

“The CARES Act wasn’t intended to place hardships on nonprofit organizations, like food banks and other support groups helping those who need food, shelter, and other assistance during this pandemic,” Hyde-Smith said.  “The Senate-passed legislation clarifies that nonprofits do not have to jeopardize cash flow that can be better used to help people.  The House of Representatives should act without delay to keep these nonprofits financially viable during this national emergency.”

Recognizing that COVID-19 forced many nonprofits to temporarily furlough or lay off employees, the CARES Act allowed nonprofits to pay 50 percent of unemployment taxes to states, while the federal government covered the other half.  However, the U.S. Department of Labor issued guidance in April requiring nonprofits to pay the full 100 percent upfront and be reimbursed later.

Introduced by U.S. Senator Tim Scott (R-S.C.), S.4209 clarifies that nonprofits, state and local governments, and federally recognized tribes are only required to provide 50 percent in payments up front.  The net cost to the employer and the federal government would remain the same, but would free up much needed money to help nonprofits stay afloat.

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Release from Senator Cindy Hyde-Smith.