Is Your Nonprofit Eligible for the Employee Retention Credit (ERC)?
The global pandemic put major financial strain on nonprofits across the country.
Some intrepid organizations kept their employees on payroll despite severe economic challenges posed by COVID-19.
If that's the case for your nonprofit, you may be eligible to receive the Employee Retention Tax Credit (ERC).
If you qualify, you could receive a maximum $5,000 per employee for 2020. This tax credit is available as part of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). In addition, your organization may also be eligible to receive a maximum of $7,000 per employee per quarter in 2021 (excluding 4th quarter per recent legislation), that’s $21,000 per employee per the Taxpayer Certainty and Disaster Tax Relief Act of 2020 and the American Rescue Plan Act of 2021.
Some intrepid organizations kept their employees on payroll despite severe economic challenges posed by COVID-19.
If that's the case for your nonprofit, you may be eligible to receive the Employee Retention Tax Credit (ERC).
If you qualify, you could receive a maximum $5,000 per employee for 2020. This tax credit is available as part of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). In addition, your organization may also be eligible to receive a maximum of $7,000 per employee per quarter in 2021 (excluding 4th quarter per recent legislation), that’s $21,000 per employee per the Taxpayer Certainty and Disaster Tax Relief Act of 2020 and the American Rescue Plan Act of 2021.
How Do You Determine Your Credit?
ERC eligibility must be carefully determined by an accounting firm that is fully aware of the complexities in play. Our team at Blue Fox is ready to assist. We've already started helping our current clients determine their eligibility and submit the appropriate documentation to the IRS. We know the ins and outs of the process which led us to build this eligibility questionnaire.
A Note From Our Founder & CEO:
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Since COVID-19 hit, we've been hard at work learning the ins and outs of all the stimulus funding and tax credits that have been rolled out during the last year. From PPP to the SBA's EID loans, we've done our best to keep you informed and up to date on all the assistance that's out there for companies big and small. The Employee Retention Credit (ERC) is one of the latest and greatest. Read our latest blog post about ERC Eligibility.
To bottom line it for you: if your organization kept staff on payroll in 2020 and 2021, despite a significant decline in gross revenue, the ERC may award you with a potentially massive payroll tax credit - up to $5,000 per employee for 2020 and up to $28,000 per employee in 2021. This credit is refundable, too. That means the IRS will send you a check for what you are owed after you make the claim. Pennies from heaven, right?! Now, is every business out there eligible to claim the ERC? Nope. (Sorry, we wish it was so but we've got to be up front with you on the facts!) There are many complexities in play, despite what some blogs and news sources are saying. For example, the ERC "interacts" with the PPP and other stimulus-related credits. Eligibility must be carefully determined if you want to ensure that Uncle Sam doesn't ask for his money back on this thing at some point in the future... That's why it's important that you work with an accountant or firm that really understands the ERC if you want to claim this credit. We are already helping our clients determine their eligibility for the ERC and we'd be happy to help you, too. So don't leave money on the table! Fill out our brief questionnaire if you would like our help and we'll get back to you as soon as possible. In Service, Chantal |
