The Federal Employee Retention Credit (ERC) and its application to nonprofit organizations. The ERC is a valuable financial opportunity for nonprofit organizations to consider, and it’s not too late to explore. Learn more from Victoria Beck, General Counsel for Regulatory Compliance at EZ-ERC, as she provides key insights into this credit program.
The Employee Retention Credit (ERC) was introduced as part of the CARES Act in March 2020 and was designed to reward employers, including nonprofits, for retaining employees during the COVID-19 pandemic. It offers organizations a significant opportunity to inject cash back into their programs and services.
Victoria emphasizes that many nonprofits mistakenly believe they are ineligible for the ERC, but the CARES Act explicitly includes 501(c)(3) organizations as eligible recipients. She also clarifies how there are two main routes to eligibility for nonprofits: a significant decline in gross receipts or demonstrating operational changes due to governmental orders related to the pandemic.
The discussion touches on the timeline for applying for the ERC, with Victoria explaining that it depends on how quickly an organization can provide the required documentation, but it’s crucial for all stakeholders to sign off before filing.
Regarding costs, Victoria describes how nonprofits to be cautious of firms charging exorbitant fees, suggesting that a reasonable fee is more appropriate. She also warns against companies promising eligibility within minutes without proper evaluation, as the ERC application process is nuanced and requires a thorough understanding of each organization’s unique situation.
Victoria stressed that the ERC can be beneficial for organizations of all sizes, even those with a small number of employees, as it can provide much-needed financial support during challenging times.
She also confirmed that EZ-ERC serves nonprofits across the United States, not limited to specific regions. The deadline for the 2020 quarters of the ERC program is April 15, 2024, while the 2021 quarters have a deadline of April 15, 2025.