Attention Nonprofit Employers: Did You Forget to Claim Refundable Tax Credits from the IRS?

From National Council of Nonprofits –

A small human services provider based in Washington, D.C. utilized the Employee Retention Tax Credit (ERTC) to keep 11 full-time employees and several part-time workers on the job throughout the pandemic. The nonprofit was able to claim ERTC relief of $85,000 for 2020 and about $115,000 for the first three quarters of 2021 based on the city-wide closure orders – one of two ways employers can meet eligibility requirements for the ERTC. This nonprofit received these refundable tax credits in addition to forgiveable Paycheck Protection Program (PPP) loans of $200,000.

A nonprofit serving children in the Pacific Northwest was able to claim $230,000 under the ERTC, which actually made it possible for the organization to add four staff positions to address increased demand for their services.

A faith-based nonprofit community center in Pennsylvania, focusing on fitness, cultural, educational, and inclusive programming, received $100,000 from ERTC in 2020 and more than $250,000 in 2021.

Sometimes nonprofits qualified for the ERTC because of government-ordered “full or partial suspensions” that limited travel, meetings, or commerce. Other times, nonprofits qualified because of suffering a certain reduction in gross receipts compared with the same quarter of 2019.

Although Congress canceled the Employee Retention Tax Credit, effective the end of September 2021, there is still time for eligible businesses, including nonprofits, to claim this refundable tax credit that can offset employment taxes and generate a refund.  

The PPP had an enormous impact in helping to sustain nonprofits through the pandemic – but the PPP program has ended. The ERTC is still available. There are two ways to qualify, and the credit can be claimed retroactively for parts of 2020 and 2021.

Find out how, here.