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Non-Profits Eligible for ERTC, up to $19,000 per Employee

The Consolidated Appropriations Act, 2021, signed on December 27th, 2020, is expanding eligibility for the Employee Retention Tax Credit (ERTC) by allowing those who received Paycheck Protection Program (PPP) loans to qualify. Prior to December 27, 2020, PPP loan recipients could not also file for eligible tax credits.

For nonprofits, the ERTC is taken against payroll taxes on the quarterly Form 941. If qualifications for the ERTC are met, an amended 941 may be filed for the applicable quarter. The ERTC is available for calendar year 2020 and potential benefits are up to $5,000 per employee per year (up to the first $10,000 paid). The ERTC is also available from January 1, 2021 through June 30, 2021 with potential benefits of up to $7,000 per calendar quarter (up to the first $10,000 paid per quarter). The total potential value of the 2020 and 2021 ERTC is up to $19,000 per employee.

How Do You Qualify?

If gross receipts meet certain reduction criteria OR your business was fully or partially suspended by a COVID-19 government order, you may qualify. Details related to eligibility are outlined in a previous blog: https://www.aafcpa.com/2021/01/04/employee-retention-credit-updates-expanded-eligibility/.

If you have questions, please contact Nichole Reilly, CPA, MBA, at nreilly@nullaafcpa.com, 774.512.4016, Courtney McFarland, CPA, MSA, at 774.512.4051, cmcfarland@nullaafcpa.com; or your AAFCPAs Partner.

About the Authors

Courtney McFarland
Courtney is an audit partner in the firm’s Healthcare Practice with over 15 years of assurance experience and a comprehensive understanding of the nuances of the healthcare industry. She delivers a full range of solutions solving the challenges that AAFCPAs’ healthcare clients face, including: audits in accordance with Uniform Guidance/Single Audit and Government Auditing Standards, 340B pharmacy program requirements, best practices for reconciliation & analysis of statistical and programmatic data, tracking and monitoring risk-based contracts, maximizing reimbursements, and guidance on healthcare reform. Courtney is a member of AAFCPAs’ Revenue Recognition Task Force, dedicated to helping the firm and clients understand best practices for an efficient and effective implementation of the robust new framework.
Nichole Reilly, CPA, MBA
Nichole is responsible for planning and executing financial statement audits for sophisticated nonprofit organizations.  She has extensive experience serving community health centers, charter schools, community development corporations and their affordable housing development projects with HUD and MHFA requirements. She has been serving AAFCPAs’ clients since 2010. Nichole delivers a full range of solutions solving the challenges that AAF’s clients face, including: audits in accordance with the Uniform Guidance/Single Audit and Government Auditing Standards, as well as the Massachusetts Uniform Financial Report (UFR). She has extensive experience providing assurance solutions, and leading high-energy teams to consistently deliver a positive, non-intrusive client experience.