Can my organization still take advantage of the ERTC (Employee Retention Tax Credit)?
Updated: Apr 6
by Rich White, MBA, General Business Services Practice Leader, Charles River CFO
The answer is YES.
As CFOs, we are often forward-facing, anticipating and addressing challenges and business risks our organizations are experiencing. The Employee Retention Tax Credit (ERTC), however, offers an opportunity to look back at the impact COVID-19 had on your organization from March 13, 2020, through September 30, 2021. While the credit is no longer available for quarters after September 30, 2021, companies can still file for the credit for the noted six quarters of applicability. If there was eligibility under one of the two qualifying tests, you might be eligible for a credit as a percentage of qualifying wages paid during those six quarterly periods.
There are two qualification tests available to determine whether you could qualify for the ERTC.
Did gross receipts decline? During any of the six qualifying quarters, was there a decline in receipts (from revenue, grants, etc.) as compared to the same period in 2019? If you meet the threshold decline, you may want to consider filing.
Was there more than a nominal impact on your business driven by governmental orders (Federal, State, or Local)? This test looks at restrictions on commerce, travel and/or meetings. These impacts can take different forms, depending on your business, so it is important to understand the qualifying factors.
Once qualification is determined, we work directly with your payroll company to understand the information needed to amend the appropriate Form 941 quarterly filings. For over 20 years, we have been working with clients to ensure accuracy, improve efficiency, and optimize business outcomes. Whether you are a for-profit or nonprofit organization, the ERTC may positively impact your bottom line. Let us work with you to determine what it could mean for you.
Two recent examples of CRCFO's ERTC service
A small start-up, for-profit scientific and technology firm with fewer than ten employees asked us to assess their ERTC eligibility. After determining qualification and filing the amended Form 941, there was a benefit of approximately $80,000.
A nonprofit organization with 100+ employees thought they would not qualify as they also had PPP loans and had received forgiveness. Organizations can take advantage of the ERTC, even if they received PPP funding and loan forgiveness, as long as the payroll identified for the ERTC was not utilized for PPP forgiveness. Charles River CFO determined eligibility, reconciled the eligible wages to quantify any PPP overlap, and coordinated the amended Form 941 filing. The result? A favorable result well in excess of $500,000.
Give us a call if you would like to understand more about what this program could mean for your organization.