Are Colleges Eligible for Employee Retention Credit (ERC)?

Key Takeaways

• Colleges with tax-exempt status may be eligible for the Employee Retention Credit (ERC).

• The ERC can offer substantial financial relief by providing a refundable payroll tax credit for qualified wages.

• Eligibility for the ERC requires careful consideration of specific criteria, and it’s recommended to consult with a tax professional.

• Despite misconceptions, institutions that received PPP loans may still qualify for the ERC under certain conditions.

• It’s not too late to apply for the ERC for 2020 and 2021, as educational institutions can still claim this credit.

Are Colleges Eligible for ERC Refund

Colleges, as pillars of education and advancement, often operate under the assumption that they are excluded from certain tax benefits designed for businesses. However, the reality is that tax-exempt organizations, including higher education institutions, are indeed eligible to claim the ERC for qualified wages paid during specific periods of the pandemic.

The ERC was established under the CARES Act and is aimed at helping employers retain their workforce by offering a refundable tax credit on payroll taxes. For colleges, this can translate into significant financial relief, especially when facing reduced revenue and increased costs associated with pandemic-related adjustments.

To qualify, these institutions must meet certain conditions, such as experiencing a significant decline in gross receipts or being subject to government-ordered full or partial shutdowns. It’s important to note that the specific thresholds and rules have evolved over time, with legislative changes expanding eligibility and increasing the benefits available.

Several government restrictions affecting colleges include:

• Mandates on enhanced cleaning and sterilization practices;
• Regulations on social distancing and limits on gathering sizes;
• Directives for remote learning and stay-at-home advisories for students;
• Suspension of on-campus classes and events;
• Interruptions in the supply chain affecting academic resources and campus operations.

Common Misconceptions about ERC Refund for Colleges

There are several myths that may deter colleges from pursuing the ERC, often based on incomplete or outdated information. Let’s address these misconceptions:

1. Only businesses with a significant revenue drop are eligible: This is not the whole truth. While a drop in revenue is one pathway to qualify, colleges can also be eligible for the ERC if their operations were partially suspended due to government mandates, regardless of their revenue performance.

2. Colleges that received PPP loans are ineligible for the ERC: Initially, PPP loan recipients were indeed excluded from ERC eligibility. However, legislation changed to allow institutions, including colleges that received PPP loans, to claim the ERC, provided they do not double-dip by using the same wages for both relief efforts.

3. The ERC is only for private or for-profit colleges: This is a misconception. The ERC is available to both private and public colleges, including nonprofit institutions, as long as they meet the eligibility criteria such as experiencing operational disruptions due to government orders or a significant decline in gross receipts.

4. ERC benefits are too small to make a difference for colleges: This is incorrect. The ERC can provide substantial financial relief to eligible colleges, with the credit amount being significant enough to support payroll expenses and other operational costs. The impact of the ERC can be quite meaningful, especially during periods of financial strain.

5. The application process for the ERC is too complex and time-consuming: While the process may seem daunting, the potential benefits far outweigh the effort. Additionally, colleges can seek assistance from financial professionals who specialize in ERC claims to navigate the process more efficiently, ensuring they maximize their entitlement without undue burden.

Because misconceptions can lead to missed opportunities, it’s essential for colleges to reevaluate their stance on the ERC. By doing so, they can uncover potential financial aid that can support their faculty, staff, and overall mission during times of economic strain. Now, let’s delve into how a specialized service can aid these institutions in maximizing their ERC benefits.

How ERTC Express Helps Colleges Maximize ERC Benefits

ERTC Express is a service designed to streamline the process of claiming the Employee Retention Credit. We provide expertise and support throughout the claim process, ensuring that colleges and universities can secure the maximum amount of credit they are entitled to. With a focus on compliance and maximizing benefits, ERTC Express becomes a valuable partner for educational institutions navigating the complexities of tax credits.

One of the key advantages of partnering with ERTC Express is their deep understanding of the nuances in tax laws and how they specifically apply to educational institutions. Our team of professionals can quickly assess eligibility, calculate potential credit amounts, and manage the necessary paperwork, reducing the administrative burden on the institution’s staff.

Step-by-step Guide: How ERTC Express Optimizes Your Refund

Step 1: ELIGIBILITY

Our Account Executives are experts in guiding colleges through the ERC application process, making sure every required document is gathered and accurately prepared for submission. They’re readily available to address any additional queries or provide further clarification throughout the process. This hands-on assistance is designed to streamline the eligibility assessment for colleges, ensuring a clear and concise application journey from the very beginning.

Step 2: PROCESSING

As soon as a college’s eligibility is confirmed, our dedicated team of CPAs and Customer Success Agents kicks off the meticulous process of preparing and processing the claim. We employ a robust “Power of 3” system to minimize audit risks and solidify the claim’s defensibility. This critical step involves the collaborative effort of three distinct CPA teams, each vetting and agreeing on the final credit calculation before the claim is officially submitted. This comprehensive review process ensures the utmost accuracy and security of your college’s ERC claim.

Step 3: RECEIVE YOUR FUNDS

Colleges are only invoiced after the successful receipt of ERC funds, establishing a risk-free partnership between us. This policy ensures that our goals are perfectly aligned with yours, prioritizing the financial benefit of your college above all. We stand by you until the ERC funds are securely in your hands, at which point our service fees are processed. This approach emphasizes our commitment to supporting the financial health and success of colleges through the ERC program.

Get Maximum Colleges ERC Refund with ERTC Express

Colleges have a unique set of financial structures and payroll considerations, making the ERC claim process more intricate. ERTC Express specializes in tailoring their approach to fit the specific needs of colleges, ensuring that no eligible wage goes unclaimed and that the credit amount is maximized.

• IRS Compliance: We ensure colleges adhere to all IRS regulations, guaranteeing compliance with our expert guidance tailored for higher education institutions.

• Trusted By The AICPA: Our AICPA endorsement reflects our commitment to excellence and professional standards, highlighting our dedication to providing colleges with services of the highest quality and integrity.

• U.S.-Based CPAs: Our team of U.S.-based CPAs, with their specialized expertise in college ERTC filings, navigates the complexities of ERTC claims to offer unparalleled support and assistance.

• Power of Three – Audit Defense: We protect colleges with our “Power of Three” audit defense, involving three CPA teams that verify the final credit amount, enhancing the claim’s defensibility.

• Refund Maximization: Dedicated to maximizing colleges’ ERTC refunds, our specialists use strategic approaches to outperform software estimates by 40-120%, proving the superiority of personalized CPA expertise.

By focusing on these areas, ERTC Express not only secures the ERC for colleges but also provides a comprehensive service that upholds the integrity and financial stability of these institutions.

Frequently Asked Questions (FAQ)

Can colleges still apply for the ERC?
Yes, it’s not too late for educational institutions to claim the ERC for qualifying wages paid in 2020 and 2021. The process can be initiated in 2022, and it’s advisable to act promptly to ensure that the opportunity is not missed.

Are wages covered by a forgiven PPP loan eligible for the ERC?
No, the same wages cannot be used to claim both the PPP loan forgiveness and the ERC. However, wages not covered by the PPP can be considered for the ERC, and it’s possible to benefit from both programs if managed correctly.

How does ERTC Express determine if a college is eligible for the ERC?
ERTC Express conducts a thorough review of the college’s operations during the eligible periods, examining factors like gross receipts and any pandemic-related disruptions to determine eligibility for the ERC.

What is the deadline for claiming the ERC?
Currently, there is a three-year statute of limitations from the date the original payroll tax return was filed to claim the ERC. Given the potential for legislative changes, it’s recommended to consult with a tax professional or service like ERTC Express for the most up-to-date information.

Can colleges still apply for the Employee Retention Credit (ERC) if they received PPP loans?

Yes, colleges that received Paycheck Protection Program (PPP) loans are still eligible to apply for the Employee Retention Credit (ERC). Legislative updates have made it possible for institutions to benefit from both programs. However, it’s important to note that the same payroll expenses cannot be claimed for both the PPP forgiveness and the ERC. This change aims to provide broader financial support to educational institutions during the pandemic, allowing them to leverage multiple relief options as long as they adhere to the specific requirements of each program