The ERTC is a refundable tax credit for eligible employer’s portion of Social Security (payroll) taxes for 2020 and the first three quarters of 2021. The program has thus far been underutilized, leaving money on the table for nonprofits that are struggling to stay afloat. Read on for information about claiming the credit retroactively, issues with delayed payments from the IRS, and a video explaining the ERTC in more depth.
Claiming the ERTC Retroactively
If you haven’t already claimed the ERTC but qualify (see eligibility requirements below), it’s not too late!
Eligibility:
- For the 2020 period, there are two ways to qualify:
- Employers whose operations were fully or partially suspended due to emergency orders from a government authority, or
- Employers that had at least a 50 percent reduction in gross receipts for a given calendar quarter (compared with the same quarter in 2019).
- For the 2021 period, the two ways to qualify are:
- Employers whose operations were fully or partially suspended due to emergency orders from a government authority, or
- Employers that had at least a 20 percent reduction in gross receipts for a given calendar quarter (again, compared with the same quarter in 2019) may be eligible.
We recently shared the article Attention Nonprofit Employers: Did You Forget to Claim Refundable Tax Credits from the IRS? from the National Council of Nonprofits that explains how to retroactively claim the ERTC. It is important to note that you must file an amended return, 941-X Form, within three years from the date the original return was filed, or two years from the date the payroll taxes were paid.
Learn More Here
Delayed IRS Payments
Many nonprofits have reported delayed ERTC payments due to the IRS backlog.
Businesses and non-profits that have yet to receive their ERTC payment and are either struggling to pay employees or on the verge of closing have the option of contacting the National Taxpayers Advocates office over the phone or submitting an IRS 911 form via fax.
- National Taxpayers Advocates phone number: 877.777.4778
- National Taxpayers Advocates fax line: 855.857.2641
More Information on the ERTC
This video presented by Steven Woolf for Montana Nonprofit Association on Aug. 4, 2022 explains the ERTC and provides an update on the legislative push to restore the credit for the forth credit of 2021.