Tax Tips for Higher Education
On March 11, 2021, President Biden signed the American Rescue Plan Act of 2021 (ARP) (Pub. L. 117-2). The ARP appropriated approximately $39.6 billion for the Higher Education Emergency Relief Fund (HEERF) and represents the third stream of funding appropriated for HEERF to prevent, prepare for, and respond to coronavirus. Taken together, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) (Pub. L. 116–136), the Coronavirus Response and Relief Supplemental Appropriations Act, 2021 (CRRSAA) (Pub. L. 116-260), and the ARP represent HEERF I, HEERF II, and HEERF III, respectively.
HEERF III is structured like the HEERF II programs under the CRRSAA, with certain important differences.
The Department of the Treasury has recently published detailed information about the Biden Administration’s tax proposals for fiscal-year 2022. This 114-page publication is traditionally called “The Green Book” by the tax community. Given the number of environmental provisions, this “Green Book” is even greener than usual. Of course, Congress institutes tax law, so…
On May 11, 2021, the U.S. Department of Education released a plethora of information about the “HEERF III” funding set forth in the American Rescue Plan Act of 2021 (ARP). Beyond the allocation table (which includes some schools that were not allocated funds in HEERF I or II), there is guidance on reporting, student and institutional uses, and the new required uses of funds. Also, it is clarified that HEERF funds may go to international and undocumented students.
Saltwater Christian College (SCC) is a private college exempt under Internal Revenue Code section 501(c)(3) and 170(b)(1)(A)(ii). They are required to file Form 990 annually.
The CFO at SCC called us wondering when the HEERF III funding and guidance was expected to be released by ED.
“It was released last week,” we answered.
“Great. Can you send us links?”
“Here they are…”
On December 27, 2020, the President signed the Coronavirus Response and Relief Supplemental Appropriations Act, 2021 (CRRSAA) (P.L. 116-260). This law has some similarities—as well as important differences—from the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) (P.L. 116–136) that was enacted on March 27, 2020. One of the differences is that CRRSAA/HEERF II added allocations for students enrolled exclusively in distance education.
Denali Christian College (DCC) is a private college exempt under Internal Revenue Code section 501(c)(3) and 170(b)(1)(A)(ii). They are required to file Form 990 annually.
We talked with DCC’s CFO about HEERF II funding and some of the differences between HEERF I (CARES Act Section 18004) and HEERF II.
“So, we can now give financial aid grants to students who are exclusively enrolled in distance education, correct?”
“Yes,” we answered. “Students enrolled in exclusively distance education courses are included in the CRRSAA section 314(a)(1) allocation formula. According to the Department of Education, amounts apportioned for students enrolled in exclusively distance education courses may be used only for financial aid grants to students.”
“Great. Where can we find out more about HEERF II funding?”
“One of the best resources is ED’s “Higher Education Emergency Relief Fund (HEERF) II Public and Private Nonprofit Institution (a)(1) Programs (CFDA 84.425E and 84.425F) Frequently Asked Questions” (updated March 19, 2021).”
The link to that resource is…
Form 990, Part V, Line 7g, asks, “If the organization received a contribution of qualified intellectual property, did the organization file Form 8899 as required?”
Troas Bible College (TBC) is a private college exempt under Internal Revenue Code section 501(c)(3) and 170(b)(1)(A)(ii). They are required to file Form 990 annually.
We were reviewing TBC’s Form 990 with their CFO. He wondered about whether they might have received “intellectual property” according to Form 990, Part V, Line 7g.
“We aren’t sure what intellectual property is and there is not an entry in the wonderful Form 990 Glossary about it. Have we missed something?”