Is ERTC Tax Relief for Churches Possible?

Is ERTC Tax Relief for Churches Possible?

Is ERTC Tax Relief for Churches Possible?

COVID-19 has dealt a huge economic blow to the entire world. Nobody actually saw it coming, and businesses and organizations all over the world have been negatively affected by it. While it was also a huge health problem, and while health is number one on everyone’s list of importance, we can’t deny the fact that organizations now need to deal with the devastating economic aftermaths of the pandemic. Minimizing their troubles doesn’t seem fair.

The government has, luckily, decided to offer some relief to those organizations and businesses, and one of the things it introduced was the Employment Retention Tax Credit:

Have you heard of this type of tax relief already? And, have you thought about taking advantage of it? You may have, but one thing could have stopped you from actually taking the final steps towards it. Basically, since you’re not running a business, but a church, you may be confused as to whether places of worship qualify for this type of help.

A great question. And, one that needs to be answered for you rather sooner than later, so that you can understand what your next steps should be. Below you’ll get your answer to that question, as well as to the question of why churches would need this kind of help at all, if you’re on the fence about it and not sure if you should apply if you find that it is possible. But, of course, the first thing to do is help you understand what ERTC actually is.

What Is ERTC?

Created as part of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), the ERTC wound up being the biggest stimulus program that the government has released. It gives employers the option of getting a payroll tax credit to alleviate the effects that the pandemic has had on their business. When I say “employers”, that may even further make your doubt if churches can be a part of the program, and if you click here, you’ll get your answer right away.

The ERTC, being a fully refundable credit, has undeniably helped a lot of businesses get back on their feet during and after the pandemic. The fact it is fully refundable means that, if you have any money left over from the credit after your tax liability has been covered, you’ll get that difference as a cash payment. Pretty great, isn’t it?

If you’ve been paying qualified wages to your employees from March to December 2020, you qualify for this opportunity. The amount of credit you’ll be able to get, of course, depends on the wages you’ve been paying. But, while the qualified wages are an eligibility criterion for everyone, you may still be confused as to whether your church can actually qualify for the help.

Do Churches Qualify?

Let’s get to the main answer here. In short, yes. Churches do qualify for this type of help. To get ERTC, churches and places of worship simply have to file the Form 941 as part of the quarterly payroll tax returns process. So, if you’ve been struggling financially, understanding that your church can qualify for this help can be highly important, as it could offer you the relief you need.

Why Would Churches Need It?

Wondering why churches would even need this type of help? They are not regarded as businesses per se, and you may find yourself assuming that this isn’t something you could benefit from. A wrong assumption, of course. The benefits of ERTC are vast, for all kinds of organizations, including places of worship, meaning you should definitely use this help, to boost the functioning of your church.

As a small or medium sized non-profit establishment, you’ve certainly been hit by the pandemic, meaning you’re probably experiencing quite some economic hardship. Thus, the ERTC can be a real lifeline, allowing you to pay your employees through the credit and keep your operations running smoothly. Community service may be needed the most in these trying times, and it would be a shame if you couldn’t keep things going. So, this kind of credit helps you stay on track and serve the community, as that’s what you do best.

Not being able to keep your employees would soon lead to the entire functioning of your organization being jeopardized, and you may even decide to close everything down at one point or another. Through the employee retention tax credit, you get to keep all of your employees and keep on doing the necessary community work, bringing people closer together and helping them when they are in need.

Discontinuing community service is not what you want, and if you’re struggling financially, but still want to keep things going, the ERTC will offer you the boost that you need and help keep you on track. This is not only what your church needs, but also what the entire community needs.