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Employee Retention Credit for Nonprofit Organizations

Check out the Employee Retention Credit (ERC) webinar we recently presented to Association of Science and Technology Centers members to learn how the ERC applies to nonprofits.

Estimate how much your company is entitled to below!

About the Employee Retention Credit

The Employee Retention Credit (ERC) is a payroll tax incentive developed to reward employers, including 501(c)(3)’s, for keeping employees on payroll during the pandemic. alliantgroup has worked closely with decision makers in Washington on this nationwide effort to help the U.S. economy not only recover from the pandemic, but to come back stronger than before.

The Employee Retention Credit is one of the most lucrative incentives included in the $1.9 trillion COVID-relief bill for nonprofits. ERC can provide even more relief than the Paycheck Protection Program (PPP).

Other impacts that could qualify your organization for the Employee Retention Credit include:

  • Full or partial shutdowns
  • Stopping programming (like cancelling performances or in-person events)
  • Paying employees who are not able to work
  • Vendor disruptions
  • Reduced hours of operation
  • Changing hours to sanitize your facility
  • And more

The ERC has gone through significant updates, so even if you and your advisor have reviewed ERC before, we encourage you to take another look with one of our specialists to uncover all qualifying activities and wages that will maximize your benefit and refund.

How Does My Organization Qualify?

Recent IRS guidance has made clear that ERC is available to 501(c)(3)’s and businesses alike. If you were affected by government-mandated shutdowns—at the federal, state, and local level—then you likely qualify for ERC.

For example, a science and technology center that had to cancel in-person events or a food bank that had to transition to delivery would both be great candidates for the ERC.

Can ERC be Combined with PPP and/or SVOG?

Yes, this credit can be claimed alongside other relief options, including Paycheck Protection Program (PPP) and the Shuttered Venue Operators Grant (SVOG). Our team of experts will work with you to identify what expenses should be allocated across these programs to ensure you maximize the amount of relief your organization receives.

How Much Can I Expect from the Employee Retention Credit?

The ERC is currently one of the largest refundable tax credits available and can deliver thousands of dollars in credits per employee each quarter. Our nonprofit clients have seen credits up to 5x more than the size of their PPP loan. Your organization can also receive a cash refund if there’s any amount leftover after your tax obligation is reduced to zero.

Here is an actual case study from a recent nonprofit client.

Nonprofit Organization

Annual Revenue: $4 Million
No. of Employees: 250
A few of their qualifying disruptions included:
Fully or partially suspended operations due to government order
– Limited commerce, travel, and meetings due to COVID-19
Reduced hours for sanitation
$1,000,000
Credits Earned

Am I Eligible if I Work with a Professional Employer Organization (PEO)?

Yes, nonprofits are still eligible for the Employee Retention Credit even if they work with a PEO. Our specialists are familiar with this staffing structure and can help guide you through the nuances.

Value of the Employee Retention Credit

The Employee Retention Credit was revamped in 2021 to reach more businesses and help more Americans stay employed. This is achieved by providing a refundable credit to offset or potentially eliminate payroll tax for business owners who were impacted by the pandemic. This is currently one of the largest credits available to business owners, delivering thousands of dollars in credits per employee with qualified wages.

A manufacturing company with an annual revenue of $115 million and 246 employees received a credit equal to $1.06 million in Q1 of 2021.

A few of their qualifying factors:

20% drop in quarterly revenue

Numerous projects were canceled or delayed to COVID-related disruptions

Delayed production timelines caused by supply chain disruptions

WHITEPAPER

Employee Retention Credit Checklist for Nonprofits

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Claim up to $26,000 per Employee

Since Congress passed the latest relief bill, we’ve helped many businesses and their advisors reduce or eliminate payroll tax, and even receive a refund. It’s important to review your impact and file with our team before the upcoming deadline. We have 1,000+ experts with hands-on experience working in every industry. Our specialists are passionate about helping U.S. businesses and will work closely with you and/or your financial advisors to maximize your credit while minimizing risk.

In addition to helping you claim the ERC, we will also review your business activity in relation to other credits you may qualify for to uncover more funding opportunities for your business to hire/retain more employees and invest in capital necessary to grow your business.

We are committed to reinforcing our economy and believe in the spirit of American business owners. We want to ensure nothing gets in the way of our country becoming #1 once again—not even a global pandemic!

Maximize Your ERC Credit

We’ll help determine your eligibility, document your processes, and maximize your return for no upfront fees! Complete the form below to estimate your refund.

erc credit eligibility check

Ready to get started?

Schedule a free consultation with our team of experts to learn more.
We’ll discuss your eligibility and help estimate your potential tax benefit.