Are Nonprofit Organizations Eligible for Employee Retention Credit (ERC)?

Nonprofit Organization
Unlocking Eligibility: Employee Retention Credit for Nonprofit Organization Staff

Key Takeaways

  • Nonprofits, including churches and educational institutions, can qualify for the ERC.

  • The ERC provides a refundable payroll tax credit for eligible wages paid.

  • Eligibility for the ERC is based on a decline in gross receipts or a full or partial suspension of operations due to government orders.

  • Receiving a PPP loan does not automatically disqualify a nonprofit from claiming the ERC.

  • Nonprofits must file amended payroll tax returns to claim the ERC.

Are Nonprofit Organizations Eligible for ERC Refund

When it comes to the Employee Retention Credit (ERC), nonprofit organizations often wonder if they’re on the guest list for this financial relief party. Well, good news! The answer is a resounding yes. If you’re part of a nonprofit, whether you’re healing, teaching, or inspiring change, the ERC might be a lifeline for your organization during these turbulent times.

The ERC is not just for the profit-driven; it extends its benefits to the heart-driven ventures of the nonprofit sector. This includes churches, schools, and all those who’ve embraced the mission to serve without the end goal of lining pockets with profits. If your organization has been hit by the economic tremors of recent events, then this credit could be your financial cushion.

Let’s dive into the eligibility criteria. Your nonprofit qualifies for the ERC if you’ve experienced a significant dip in your gross receipts or if your operations were fully or partially suspended due to government orders. Specifically, there’s a Gross Receipts Test that looks at the numbers and a Government Orders Test that considers the impact of mandates on your activities.

Several government regulations impacting nonprofit organizations include:

  • Stricter requirements for cleaning and sanitizing workspaces;
  • Social distancing rules and limitations on the size of gatherings;
  • Disruptions in the supply chain affecting essential supplies and resources;
  • A shift to remote operations and virtual services where feasible; and
  • Temporary shutdowns of physical locations and in-person services.

Common Misconceptions about ERC Refund for Nonprofit Organizations

Let’s bust some myths! First, receiving a Paycheck Protection Program (PPP) loan does not mean you’re out of the running for the ERC. The two can coexist, just not for the same payroll dollars. It’s like having a burger and fries; they’re great together, but you wouldn’t dip your burger in ketchup twice.

  1. Nonprofits Are Excluded from ERC Eligibility: A prevalent misconception is that nonprofit organizations are automatically ineligible for the Employee Retention Credit (ERC). In reality, nonprofits, including 501(c)(3) entities, are eligible for the ERC if they meet specific criteria such as experiencing a significant decline in gross receipts or government-mandated operational disruptions due to COVID-19.

  2. Only Nonprofits with Complete Shutdowns Qualify: Some believe that an organization must be completely shut down to qualify for the ERC. However, nonprofits that have experienced partial suspensions of their operations as a result of government orders are also eligible, not just those that have been fully shut down.

  3. Receiving Public Grants or Funding Disqualifies Nonprofits: Another common myth is that receiving public grants or funding automatically disqualifies nonprofits from ERC eligibility. This is not the case; receiving public support does not prevent a nonprofit from claiming the ERC, as eligibility is based on operational impact and revenue decline criteria.

  4. The Process Is Too Complicated for Nonprofits to Navigate: While the ERC application process can be complex, this should not deter nonprofit organizations from applying. Many nonprofits can benefit significantly from the credit, and there are resources and experts available to help organizations navigate the process and maximize their refund.

Understanding these misconceptions can empower nonprofit organizations to more confidently explore their eligibility for the ERC and secure much-needed financial support during challenging times.

How ERTC Express Helps Nonprofit Organizations Maximize ERC Benefits

Now, let’s talk about getting you that credit. ERTC Express is like the GPS for your ERC journey. We’re here to ensure you reach your destination without any wrong turns. We understand the importance of every dollar to a nonprofit and are committed to helping you secure every cent you’re entitled to.

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

ERTC Express Step-By-Step Guide
ERTC Express Step-By-Step Guide


The first step is to determine your eligibility. ERTC Express will look at your gross receipts and your operations to see if you meet the requirements. We’ll help you understand the fine print and ensure that your organization’s unique circumstances are considered.


Next, we process your claim. ERTC Express takes the wheel, navigating the complex tax roads while you can focus on what you do best – running your nonprofit. We’ll handle the paperwork, calculations, and ensure that your claim is IRS-proof, minimizing the risk of bumps down the road.


Finally, receive your funds. Once your claim is processed and approved, you’ll see the funds roll in. This isn’t just about getting a refund; it’s about injecting your nonprofit with the financial resources to continue your invaluable work. ERTC Express aims to get you these funds swiftly and smoothly.

Remember, while ERTC Express can be a valuable co-pilot, it’s essential to have your documentation in order. Keep track of your payroll records, tax filings, and any proof of reduced operations or receipts. This will make the journey to your ERC refund faster and less stressful.

Maximize Your Nonprofit Organization’s ERC Refund with ERTC Express

Get Maximum Nonprofit Organizations ERC Refund with ERTC Express

Let’s focus on maximizing your ERC refund. It’s like finding hidden treasure in your own backyard. You might not see it, but with the right tools and a bit of digging, you can uncover financial support that can be a game-changer for your nonprofit. ERTC Express is that trusty metal detector in your search for the ERC treasure.

  • IRS Compliance: ERTC Express strictly follows IRS guidelines to ensure high compliance for client claims.
  • Trusted by the AICPA: Recognized by the AICPA for our commitment to excellence and professional standards.
  • U.S.-Based CPAs: Our team of U.S.-based CPAs offers expert support for ERTC filings, ensuring top-tier guidance.
  • Power of Three – Audit Defense: Our “Power of Three” strategy uses three CPA teams to verify claim accuracy, boosting defensibility.
  • Refund Maximization: We use effective strategies to maximize refunds, often exceeding those from large companies by 40-120%.

Most importantly, we, at ERTC Express prides itself on a personalized approach. They understand that no two nonprofits are alike, and they tailor their services to fit your specific needs. This isn’t a one-size-fits-all situation; it’s a bespoke suit that fits your organization perfectly.

Frequently Asked Questions (FAQ)

Are donations considered in determining a significant decline in gross receipts for nonprofits?

No, the determination of a significant decline in gross receipts for ERC eligibility primarily considers the organization’s overall revenue, not limited to or exclusively focused on donations.

How do I know if my nonprofit organization is eligible for ERC?

Determining eligibility can feel like solving a puzzle, but here’s a clue: look at your revenue and your operations. If you’ve seen a significant decline in gross receipts or had to halt or cut back your activities due to government orders, you might just have a match. It’s about the impact on your nonprofit’s financial health and its ability to carry out its mission.

What are the deadlines for filing for the ERC?

Time is of the essence, and when it comes to the ERC, it’s no different. The deadlines for filing for the ERC are tied to the statute of limitations for payroll tax returns, which is generally three years from the date the original return was filed or two years from the date the tax was paid, whichever is later. This means that for wages paid in 2020 and 2021, you need to get the ball rolling before these deadlines approach. It’s like a ticking clock, and you don’t want to miss out on your chance to claim what could be a substantial sum for your nonprofit.

How does ERTC Express ensure maximum refunds for nonprofits?

ERTC Express is like a skilled detective when it comes to sniffing out the maximum refund for your nonprofit. They leave no stone unturned, meticulously examining your payroll records, cross-referencing IRS guidelines, and applying their tax expertise to uncover every dollar you’re entitled to. It’s a thorough process, designed to maximize your refund without cutting corners.

They start by getting to know your nonprofit’s story—how the pandemic affected you, what challenges you faced, and how you’ve managed to keep your mission alive. This isn’t just about crunching numbers; it’s about understanding the context behind those numbers. Because when it comes to the ERC, context matters. It’s the difference between a good refund and a great one.

Can Nonprofit Organizations Qualify for the ERC Even If They Continued Operating During the Pandemic?

Yes, nonprofit organizations can qualify for the Employee Retention Credit (ERC) even if they continued their operations throughout the pandemic. Eligibility for nonprofits is not solely based on whether they ceased operations but also includes criteria such as experiencing a significant decline in gross receipts or facing full or partial suspensions of their operations due to government-mandated restrictions related to COVID-19. Therefore, nonprofits that remained operational but were impacted by these factors should explore their eligibility for the ERC to access potential financial support.

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