Employee Retention Credits
In This SectionThe Employee Retention Tax Credits (ERTC) created under the CARES Act are refundable payroll tax credits accessible to nonprofit organizations and are now significantly expanded. The 2020 credit applied to 50% of qualified wages, up to $10,000 in wages/year, and PPP recipients were previously ineligible to access the ERTC. The 2020 ERTC is now retroactively available to 2020 PPP recipients for certain wages not covered by PPP forgivable loans.
The 2021 credit is valued at 70% of qualified wages, up to $10,000 in wages/quarter per employee for the entire 2021 calendar year, amounting to up to $28,000 in refundable payroll tax credits per employee. Employers that receive Paycheck Protection Program loans or Shuttered Venue Operators Grants in 2021 will qualify for the expanded ERTC for wages that are not also covered by a forgivable PPP loan or an SVOG grant.
Complete guidance on the expanded ERTC is still awaited. In the meantime, the IRS has issued an initial overview, and the 2019 FAQs are a good starting point for becoming more familiar with this provision. Orchestras may also wish to review our dedicated ERTC talking points to urge Congress to retain nonprofit access to the ERTC in the 4th Quarter of 2021.
- IRS Issues January 27, 2021 ERTC Announcement
- IRS Processing Backlog Estimates (click on filed a tax return)
- Treasury Guidance on Retroactive Access to 2020 ERTC (PDF)
- Treasury Guidance on 2021 Q1 and Q2 ERTC
- Treasury Guidance on 2021 Q3 and Q4 ERTC
- Form 7200: Advance Payments of Employer Credits
- Form 941 X: Claiming Credits for Previously Filed Quarters
- Form 941: Employer’s Quarterly Federal Tax Return
- Internal Revenue Service Employee Retention Credit FAQs (to be updated)
- Penalty Relief for Failure to File Employment Taxes (PDF)
In This Section
- Federal Assistance
- Shuttered Venue Operators Grant (aka Save Our Stages)
- Paycheck Protection Program and Loan Forgiveness
- Families First Paid Leave Provisions
- Pandemic Unemployment Benefits, Including Self-Employed individuals
- SBA Economic Injury Disaster Relief and Loan Advance
- Relief for Nonprofits Self-Insuring Unemployment Benefits
- International Artist Visas
- New Charitable Giving Incentives
- National Endowment for the Arts Funding
- Background
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