PPP Forgiveness Underway With New Rules for Loans Less Than $50,000

After substantial delays, lenders across the country are now accepting forgiveness applications for loans obtained through the CARES Act. Under the massive stimulus legislation passed in late March 2020, the Paycheck Protection Program (PPP) provided assistance to small businesses, including churches and other nonprofits, of up to 2½ times the monthly payroll for the entity involved. Initially designated as a loan, the legislation provided that the loan could be forgiven if used for “covered“ expenses during a specified timeframe.

While the “covered period” has ended for many entities who received PPP loans, the forgiveness process has not been opened until recently. The Small Business Administration (SBA), the administrator of this program, had delayed the forgiveness process, awaiting further legislative guidance from Congress. It had been expected that Congress would grant blanket forgiveness to certain borrowers. While it was proposed that all loans under $150,000 would be automatically forgiven, that legislative action never materialized.

Therefore, in recent days the SBA has begun accepting forgiveness applications from participating banks that made PPP loans. Although the application for forgiveness must go through the borrower’s bank, the SBA has final approval authority over any forgiveness application.

Since no blanket forgiveness provision was passed by Congress, the SBA has not only started the forgiveness process, but they have also provided for a simplified forgiveness application for those who received PPP loans of less than $50,000. While documentation of expenditures are still required, the application for those with loans of less than $50,000 has been modified to require answers to only a few questions. It is expected that this new simplified process, using Form 3508S, will greatly expedite forgiveness under the PPP program.

All churches who received loans of less than $50,000 should use the Form 3508S forgiveness application. Please note that the affiliation rules mentioned at the top of the new simplified forgiveness application do not apply to churches.

Most lenders will have the simplified application form available electronically within the next few days. While the local church should seek forgiveness as soon as possible, an applicant has up to 10 months after their “covered period“ ends to apply for forgiveness. Therefore, time is available to collect all documentation needed to receive complete forgiveness of the PPP loan.

Additional information about the forgiveness process can be found on the Small Business Administration’s website at www.sba.gov.

Posted in 10 - October 2020, 2020 | Leave a comment

IRS Launches “Get My Payment” Website

Late in the afternoon on Tax Day, April 15, the U.S. Department of Treasury and the Internal Revenue Service launched the “Get My Payment” website for those who filed a tax return in 2018 or 2019, but did not provide their direct deposit banking information on either return. Generally, this would apply to persons who owed taxes and mailed in a tax payment or submitted a tax payment online.

For individuals who received refunds on either their 2018 or 2019 tax returns , there is no need to take any action since you should have already received, or will soon receive, your “Economic Impact Payment” from the recently passed stimulus legislation.

For those who did not provide direct deposit banking information on their 2018 or 2019 tax returns, the “Get My Payment” website allows taxpayers to enter certain information securely and be able to get their “Economic Impact Payment” sent directly to their bank account, rather than waiting for a paper check to be forwarded sometimes between the first of May and the middle of September.

Information on the “Get My Payment” website can be found here. To go directly to the “Get My Payment” website, you can go here.

  • Social Security Number
  • Date of birth
  • Mailing address
  • Adjusted gross income from your most recent tax return submitted, either 2019 or 2018
  • Refund or amount owed from your latest filed tax return, and
  • Bank account type, account, and routing number

To have your stimulus check directly deposited rather than mailed to you, the following information will be requested at the “Get My Payment” website:

All of this information should be gathered in advance before entering the IRS website.

Please be aware that scammers will try to divert you to other non-governmental websites to enter this same information. You should be extremely cautious to only enter this vital information on the official “Get My Payment” website.


(Disclaimer: This information is provided strictly as a public service by the Church of God Benefits Board. The Board of Trustees and the staff of the Benefits Board are not engaged in rendering financial advice, legal advice, or other financial planning services. If such advice is desired or required, the services of a competent professional should be sought.)

Posted in Uncategorized | Leave a comment

Stimulus Bill Changes Retirement Plans for 2020

The stimulus bill, signed by President Trump on March 27, 2020, formally known as the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), provided some specific changes to retirement plans, including the Ministers’ Retirement Plan administered by the Church of God Benefits Board, Inc.  However, the changes are only applicable during the calendar year of 2020.

Hardship Distributions

During 2020, participants may take certain hardship distributions of up to $100,000. The distribution, if meeting the criteria set out in the legislation, would be exempt from the 10% penalty that normally applies to those taking distributions before reaching the age of 59½.

To qualify for an eligible distribution under this hardship provision, the participant, his or her spouse, or dependent must have been diagnosed with the coronavirus, or lost income due to a layoff, business closure, quarantine, reduction in hours, or inability to work due to the lack of child care. The participant may self-certify to their eligibility for this special hardship distribution.

Although the 10% early surrender penalty is waived, the distribution is taxable. However, the taxes can be spread over three years if the participant so chooses. Further, the participant may re-contribute the funds to the retirement plan within three years without regards to the contribution limits.

Distributions requested under this hardship provision must occur before December 31, 2020.

Expanded Member Loans

The CARES Act also addresses member loans from retirement plans. Under the legislation, a participant, diagnosed with the coronavirus or affected by economic loss from the virus, can take a loan from their retirement account of up to $100,000, or one-half (½) of their account balance, whichever is less. This amount is double the current loan limit. 

Further, until December 31, 2020, participants with existing or new loans – and impacted by the coronavirus, may delay any re-payments due in 2020. This provision basically extends the repayment deadline for these loans by almost a year. 

To qualify for the expanded loan provision and the deferred payment provision, the participant must:

• Be diagnosed with COVID-19
• Have a spouse or dependent diagnosed with COVID-19, or
• Have experienced adverse financial consequences as a result of being quarantined, furloughed, laid off, having work hours reduced, being unable to work due to the lack of child care due to COVID-19, closing or reducing hours of a business owned or operated by the individual due to COVID-19, or other factors as determined by the U.S. Treasury Secretary.

Required Minimum Distribution Waived in 2020

The CARES Act also waves the requirement for a required minimum distribution (RMD) in 2020 for all participants. This provision was inserted in the legislation to allow participant’s accounts the opportunity to grow after the massive sell off caused this year by the coronavirus.

Other Item Included

Although not specifically related to retirement issues, the CARES Act contains a provision allowing individuals to deduct, “above the line,” up to $300 for cash contributions made to charitable organizations, even if that person does not itemize. This provision will be allowed on 2020 tax returns filed next year.

Conclusion

While the information discussed here is included in this massive 880-page bill, the regulations to implement each provision have not been written and it is expected that those regulations will take at least several weeks to be fully promulgated. The Ministers’ Retirement Plan, administered by the Church of God Benefits Board, Inc., will seek to comply with the legislation while awaiting final regulations. However, in some situations, additional guidance will be needed from the Internal Revenue Service before we can proceed.

(NOTE: The information provided is based upon a review of the legislation, discussions with officials engaged in the direct negotiation of this legislation, and published reports on the legislation. Please be aware that regulations to carry out the legislation could change the information provided above.)

Posted in 03 - March 2020, 2020, Uncategorized | Leave a comment

Coronavirus Continues to Impact Financial Markets

Less than two weeks after the outbreak was declared a pandemic, COVID-19 (coronavirus) continues to cause great volatility in the financial markets. No investment has been immune to this decline and there has been no safe place to hide in the financial markets during the massive sell off.

The Numbers
To understand the financial impact of the coronavirus, it is important to look at just a few of the statistics concerning the financial markets:

  • Stocks just finished their worst week since the Great Financial Recession of 2008, closing down more than 15% over the last week alone. 
  • At the closing of 9 out of the last 10 trading days, the S&P 500 moved more than 4%, either up or down, from the day before. Previously, the index had only moved six days in a row more than 4% and that occurred in 1929.
  • It took 790 trading days for the Dow to go from 20,000 to over 29,000. It took only 43 trading days to lose that much and go below 20,000 again.
  • The Dow ended the week at 19,173. Prior to this pandemic, the Dow had not been below 20,000 since February 2017.
  • On January 19, 2017, the day before President Trump took office, the Dow closed at 19,804.
  • The 10-year Treasury note, while recovering some in the last few days, traded as low as .40% within the last couple of weeks. The 30-year Treasury note traded below 1% in the same time period, both reaching all-time lows. As of the close of business on Friday, March 20, the 10-year Treasury was at .94% and the 30-year Treasury was at 1.55%. Simply stated, that means that if you bought a Treasury note from the government for 10 years, they would pay you less than 1% per year for the next 10 years, or 1.55% per year for the next 30 years.
  • U.S. produced oil declined almost 30% last week and was trading at just above $20 a barrel by the end of the week.
  • Even traditionally safe assets, such as gold, traded down last week.

Preliminary report shows that jobless claims may hit 2 million, an unprecedented level, when they are reported later this week. However, the pain from the market downturn is probably not over.

Going Forward
So, during this “black swan” event, what should investors be doing during these turbulent times?

Over the past few weeks, I have consistently given the same advice:

  • Breathe – take a deep breath and do not act out of fear. Most decisions made out of fear are unfounded.
  • Locking In Losses – remember that if you move out of the stock market while it is down, you are locking in your losses. If you do not sell, you only have a paper loss. However, if you move out of the market, you turn those paper losses into realized losses. So, be careful about your decisions regarding asset allocations. 
  • Be prepared for less income in the coming weeks – It is expected that revenue into local churches will drop at least 20% in the next few weeks. That number could greatly increase if the coronavirus pandemic continues for longer than expected. Therefore, it is critical that our participants be aware that they may have to survive on less for the next few weeks and even months. An emergency account is more critical now than ever.
  • Be proactive with your creditors, especially your mortgage company – At the moment that you see your income is going to be reduced, you should be in conversation with your creditors about pending payments. Many mortgage companies are already offering interest-only payments during this crisis. You should contact those creditors immediately to discuss what options are available.
  • Taxes are delayed – On March 20, the U.S. Treasury Department announced that they were delaying the requirement to file taxes from April 15 until July 15. Therefore, you do not have to file your taxes until July 15, nor do you have to pay any taxes owed until July 15. Please note that this delay does not apply to minister’s quarterly taxes that are due for the first quarter on April 15.

Benefits Board/Church Loan Fund’s Actions
Understanding the times that we are in and that we are facing over the next several months, the Church of God Benefits Board, Inc. and the Church Loan Fund, Inc. are also taking specific steps to assist our participants during these turbulent times:

  • Asset allocation changes are now being allowed on a daily basis, rather than weekly as per our normal policy.
  • Each church loan is being evaluated on a case-by-case basis for relief.
  • The Church of God Benefits Board and the Church Loan Fund have implemented their business continuity plans.  While currently we are still operating in our corporate offices and following normal business hours, we are prepared to work remotely should health and governmental officials dictate that such occur. All operations will continue as normal, even if remote work were to be required.

While we cannot stop the gyrations in the financial market from occurring, our trained and professional staff remain available to answer any questions that you may have concerning your retirement account or your church loan. Do not hesitate to call on us if we can be of assistance. 

Posted in 03 - March 2020 | Leave a comment

Benefits Board Operations Continue Uninterrupted

As the coronavirus situation evolves worldwide, the Church of God Benefits Board, Inc./Ministers’ Retirement Plan is working hard to make sure that our operations continue normally, and that we are always here to serve our participants.

As of today, the staff of the Benefits Board continues to process new applications, accept and deposit new contributions, process and pay out withdrawal requests, handle member loan requests, and answer our participant’s calls and emails. We also continue to maintain regular office hours from 8:00 am until 5:00 pm ET daily. Even though you may not want to visit our offices until this outbreak is over, we remain available to respond to your questions by phone at (423) 478-7131 or by e-mail at info@benefitsboard.com

Of course, the coronavirus situation is changing daily – and oftentimes, hourly. Should the situation warrant a change in our operations, we will communicate those changes to you as soon as possible. 

We also suggest that you secure online access to your Ministers’ Retirement Plan account if you have not done so already. You can register to obtain online access at https://member.benefitsboard.com/login. At this portal site, you can review your balance, print out statements, and see your most recent contributions.

During the market volatility caused by this and other issues, participants can make asset allocation changes by going straight to our website (www.benefitsboard.com). Once at the website, type “fund allocation” in the search bar and you will immediately be taken to a page that will allow you to make allocation adjustments among our different investment options. Although we encourage all members to have access to the portal site discussed above where you can see the balance and activity in your account, you do not have to have access to that site to make allocation changes. 

Please know that the staff of the Benefits Board is here to serve you during these trying times. Do not hesitate to reach out to us if we can be of assistance.

Sincerely,

Arthur D. (Art) Rhodes
President and Chief Executive Officer

Posted in 03 - March 2020, 2020, Uncategorized | Leave a comment

Comments on the Upheaval in the Financial Markets due to the Coronavirus

“The downturn in the financial markets over the past few days have been a stark reminder to all of us that while stocks move upward, they also can move down.  After more than a decade of increases, the substantial downturn, especially so rapidly, has been a major wake-up call for many investors.  

After a week when investors suffered deep losses at a rate not seen since the Great Recession more than ten years ago, it is important to understand that this situation is far from normal. However, fear is a strong motivator and has been the primary impetus behind the market losses recently.  

To put things in perspective, the fear surrounding the COVID-19 coronavirus outbreak caused the Dow to decline 12.4%, the S&P 500 to drop 11.5%, and the Nasdaq, which actually closed Friday with a marginal gain, to decline by 10.5%, all in just five days of trading last week. Since all three stock indices have dropped at least 10% from their peak, we have technically entered a market “correction.” To enter a true “bear market,” the indexes would have to drop 20% from their peaks.  We certainly hope that does not occur.  

While some have suggested that we were due for a correction, the speed of this correction has caused many to worry about where we go from here.  Even more concerning is that this correction was not caused by market-driven events, such as bad earnings reports, inflationary concerns, or excessive regulatory actions. Instead, fear of a coronavirus outbreak, with less than 100,000 cases globally, caused a massive sell off.  While broken supply chains and the inability to obtain component parts from China have certainly been worries, in reality those problems have not yet occurred on a wide scale. However, in this case it seems that perception has become reality. 

Not only did the stock market suffer but oil prices declined as well. Because the demand was so great from investors trying to get out of “risk” investments, such as stocks, into “non-risk” investments, the yield on the 10-Treasury note dropped to an all-time low, closing out the week at 1.127%. So, the entire “market” has suffered. 

While you have heard all this from the countless commentators on your favorite news channel, I know that your primary concern is about your own personal investments, and particularly your account in the Ministers’ Retirement Plan at the Church of God Benefits Board. I wish that I could tell you that all is going to be great so do not worry.  However, I do not have a crystal ball that provides me with that information.  

MAKE WISE INVESTMENT CHOICES

All of us have 20/20 vision in hindsight.  We only wish we had taken our gains from 2019 and gotten out of the stock market.  However, since we did not make that choice, we now must make choices based upon our current environment.  Getting out of the stock market completely now means that you turn your “paper” losses into realized losses.  

If the markets begin to recover, your “paper” losses could be made back in a few weeks or months.  On the other hand, you do not want to ride down a sinking ship, especially if you are near, or in, retirement.  

So, my advice is to seek guidance from our Heavenly Father and then make your investment choices based upon what is pleasing to your soul and on what allows you to sleep at night in perfect peace. 

WE HAVE BEEN HERE BEFORE 

Just two years ago in late January and early February of 2018, we experienced a similar rapid drop in the stock markets.  However, as you recall, since that time the markets have done nothing but climb, with only momentary setbacks.  Will we experience recovery that fast this time or will the markets continue to drop?  I wish I knew the answer to that question, but I do not. 

However, I do know the One that knows that answer!

While I certainly do not want to overly “spiritualize” your investment decisions, I truly believe that we serve a God that cares about every concern that touches our lives.  So, during this time of market volatility, join with me in prayer for guidance as we all make investment decisions regarding our future.”

Arthur D. Rhodes
President and Chief Executive Officer
Church of God Benefits Board, Inc. 

(Note: The staff at the Church of God Benefits Board will be happy to assist you, but we cannot guide you in your investment allocation.  We are specifically prohibited by law from providing investment advice.)

Posted in Uncategorized | Leave a comment

Online Filing of Forms W-2 and W-3

Churches and other church-related employers, along with other businesses, may file Forms W-2 and W-3 electronically by visiting the Social Security Administrations’ website at www.socialsecurity.gov/employer/. On the website, you will need to select “Business Services Online (BSO)” and register as a user. Once registered, you can upload electronic wage files or use the site’s “Create Forms W-2 Online” to send electronic information to the Social Security Administration. This option allows you to create “fill-in” versions of Forms W-2 for filing with the federal government and to print out copies of the forms for filing with state or local governments, distribution to your employees, and for your records. From the information filled in on the Form W-2s, a Form W-3 will be created for you.
 
Due to a change in the law in 2016 (Public Law 114-113), W-3 forms now must be transmitted to the Social Security Administration (and 1099s to the Internal Revenue Service) by the end of January, whether you are filing by paper or electronically. Therefore, all W-2s and Form 1099s must be forwarded to the individuals AND to the appropriate governmental agency by no later than January 31.
 
Because of this change, it is recommended that you get the W-2s and 1099s out to the individuals as early as possible so that changes, if necessary, can be made prior to the mandatory filing date of January 31.
 
Further, church treasurers should consider using the government’s electronic filing system (www.socialsecurity.gov/employer/) to complete both their W-2s and W-3. After a simple registration process, W-2s can be completed, printed, and then filed electronically.
 
Just remember that if you wait to file your W-2s and 1099s with the government in February or March, you will be late. The deadline is January 31.

Posted in Uncategorized | Leave a comment

IRS Announces 2020 Standard Mileage Rate

The Internal Revenue Service recently issued the revised standard mileage rate which is used to calculate the deductible costs of operating an automobile for business purposes during 2020.

Beginning January 1, 2020, the standard mileage rate for the use of a car for business purposes will be 57.5 cents per mile for business miles driven – a one half of a cent decrease per mile from the 2019 rate. The standard mileage rate is based on an annual study of the fixed and variable costs of operating an automobile.

Churches that follow an accountable reimbursement plan should use the new rate to budget expenses for 2020.

Posted in 01 - January 2020, 2020, Uncategorized | Leave a comment

Board Grants Year-End “Bonus” to Participants

In the recent meeting of the Board of Directors of the Church of God Benefits Board, the entity charged with managing the Ministers’ Retirement Plan, action was taken to grant a special year-end interest allocation to all participants in the Trustees’ Fund.

Because earnings in the Trustees’ Fund were better than anticipated in 2019, this one-time allocation of interest was approved by the board to be distributed on December 20, 2019. Each participant with an investment in the Trustees’ Fund will receive a special interest allocation on a pro-rata basis. The allocation is expected to amount to over 1.60% of the participant’s investment in the Trustees’ Fund. For example, a participant with $1,000 in the Trustees’ Fund will have approximately $16.00 in interest added to their account while a person with $100,000 in the Trustees’ Fund will receive approximately $1,600. The pro-rata amount that each person receives will be based solely on the amount that person has invested in the Trustees’ Fund – and will not take into consideration the balances in the equity investments.

With the additional interest of 1.60%, the effective rate for the Trustees’ Fund in 2019 will exceed 5.60%.  

In making this announcement of the special year-end interest allocation, Board Chairman Mark Walker also announced that the return on the Trustees’ Fund for 2020 will continue to be at four (4%) percent. In a time when fixed return rates remain at a historical low, the Board determined that it was extremely fortunate that the Ministers’ Retirement Plan can continue to pay at a rate that greatly exceeds the market rate. While the Board has projected the rate for the Trustees’ Fund to remain at four percent in 2020, it is possible that the rate could change based upon market conditions.

Since the retirement plan is a non-profit entity, all earnings, outside of an allowable reserve, must be passed on to participants. With earnings greater than expected in 2019, the one-time allocation became the fastest and most economical way to make those additional earnings available to participants.

Chairman Walker also announced that the board would still offer the incentive bonus for new participants who join the plan in 2020. For any new participant who joins in 2020, the plan will match dollar-for-dollar the contributions made in 2020, up to $500 per participant.

Participants are reminded that they may invest in three other options besides the Trustees’ Fund. The other options are all based upon stock funds and fluctuate with the stock market. Your ability to withstand volatility should be taken into consideration before making any investment selection. Further, you should always remember that past performance is not a guarantee of future performance.

Posted in 12 - December 2019 | Leave a comment

Year-End Contributions to Your Retirement Account

All pension contributions received in the Board’s office by the close of business on Friday, December 27, 2019, will be posted to the participant’s account and will apply against the participant’s 2019 contribution limits. Contributions received in this office after that date, regardless of when they were mailed, will be posted against the participant’s 2020 contribution limits. For pension posting matters, the date of receipt by the Benefits Board determines when the amount is posted.

However, that does not prohibit those amounts from being claimed as contributions in the year they were deducted for tax purposes. For example, a pastor has $100 withheld from his salary on December 31, 2019 through a salary reduction agreement. The pastor’s W-2 form would be reduced by that $100 in Box 1 (while reporting the same in Box 12), even though the contribution to the pension plan was not actually posted at the Benefits Board until after January 1, 2020.

To ensure that your electronic contributions and church loan payments are posted in 2019, they will need to be sent to us no later than Monday, December 23, 2019.

It should be noted that the regular IRS rules for charitable contributions are slightly different. If you want a contribution to count as a charitable gift in 2019, it must be given to the church in 2019 or it must be mailed to the church in 2019, even though it may not be received until after the New Year. The date of postmark determines the year in which you receive credit for the contribution to your local church. On the other hand, on the first Sunday in January, you cannot date your check for December in hopes of getting credit for 2019.

Posted in 12 - December 2019, Charitable Gifts, Ministers, Retirement Contributions | Leave a comment