Maximizing The Employee Retention Credit for Nonprofits

The Employee Retention Credit (ERC) is a game-changer for nonprofits, offering a lifeline to businesses who experienced hardships throughout the COVID-19 pandemic. In this article, we'll delve into what ERCs are and how they can significantly benefit nonprofit organizations.

Understanding Employee Retention Credits (ERCs)

The Employee Retention Credit (ERC) is a Payroll Tax Credit Refund designed to reward businesses, including nonprofits, for retaining employees during the COVID-19 crisis. It's a beacon of hope for organizations striving to maintain their workforce while navigating through economic uncertainty.

Nonprofits have the opportunity to receive substantial refunds, with potential benefits of up to $5,000 per employee in 2020 and up to $7,000 per employee, per quarter (excluding the 4th quarter) in 2021, for qualified wages. The total refund potential reaches an impressive $26,000. What makes this even better is that the ERC is not a loan – it's a refund check that nonprofits can use as they see fit.

The Evolution of ERCs

The ERC wasn't born overnight; it evolved and expanded to provide greater support to businesses and nonprofits. It was initially introduced in March 2020 as part of the CARES Act, offering relief during the early days of the pandemic. As the situation continued to develop, the Consolidated Appropriations Act in December 2020 and the American Rescue Plan Act in June 2021 further expanded and enhanced the ERC, making it an even more valuable resource.

Qualifying for ERCs

To take advantage of the ERC, nonprofits need to meet specific criteria. If you retained your W2 employees in 2020 and/or 2021 and experienced any of the following, you might be eligible:

1. A Reduction in Revenue: Your nonprofit's revenue took a hit due to the pandemic's economic impact.

2. A Business Impact from a Government Mandate: Government mandates or restrictions directly affected your organization's operations.

3. Started a New Business after February 15, 2020: If you embarked on a new nonprofit venture during this period, you could still be eligible for ERC benefits.

It's important to note that while the IRS has announced that it won't accept new ERC credit claims until after January 1, 2024, you can still prepare your claim and assess your eligibility. Being proactive in this regard ensures you'll be at the forefront when the time comes to claim your well-deserved ERC.

Let the Experts Help

Navigating the intricacies of ERCs can be complex, but you don't have to go it alone. You have an experienced team of CPAs waiting to assist you in getting qualified, and the best part is that you won't need to make any upfront payments. You have nothing to lose – you only pay after you receive your refund, making this a risk-free opportunity to benefit your nonprofit.

The Employee Retention Credit for nonprofits is a powerful tool to bolster your organization's financial health. By understanding and utilizing this credit, you can secure much-needed funds to support your mission and continue your valuable work. Don't miss out on this opportunity; take action and explore how ERCs can benefit your nonprofit today.

We work with a team of experienced CPAs that will help you get qualified with no upfront cost. You pay nothing until after you receive your refund. If you do not qualify, you pay nothing, so there is nothing to lose!

To get started book your free consultation below.