Non-Profits Eligible for ERTC, up to $19,000 per Employee

The Consolidated Appropriations Act, 2021, signed on December 27^th, 2020, is expanding eligibility for the Employee Retention Tax Credit (ERTC) by allowing those who received Paycheck Protection Program (PPP) loans to qualify. Prior to December 27, 2020, PPP loan recipients could not also file for eligible tax credits.

For nonprofits, the ERTC is taken against payroll taxes on the quarterly Form 941. If qualifications for the ERTC are met, an amended 941 may be filed for the applicable quarter. The ERTC is available for calendar year 2020 and potential benefits are up to $5,000 per employee per year (up to the first $10,000 paid). The ERTC is also available from January 1, 2021 through June 30, 2021 with potential benefits of up to $7,000 per calendar quarter (up to the first $10,000 paid per quarter). The total potential value of the 2020 and 2021 ERTC is up to $19,000 per employee.

How Do You Qualify?

If gross receipts meet certain reduction criteria OR your business was fully or partially suspended by a COVID-19 government order, you may qualify. Details related to eligibility are outlined in a previous blog: https://aafcpa.com/2021/01/04/employee-retention-credit-updates-expanded-eligibility/.

If you have questions, please contact Nichole Reilly, CPA, MBA, at nreilly@aafcpa.com, 774.512.4016, Courtney McFarland, CPA, MSA, at 774.512.4051, cmcfarland@aafcpa.com; or your AAFCPAs Partner.