As I mentioned recently, I’ve partnered with my friend, attorney and fellow mystic Rabbi Jay Michaelson, to do outreach to faith communities and nonprofits to help them receive their fair share of the Employee Retention Tax Credit (ERC for short). There’s been a lot of confusion about the ERC, but it’s not really that complicated. Like the PPP, the ERC reimburses organizations who had employees on payroll during the early phases of Covid, 2020 and 2021. But unlike PPP, you can apply retroactively for up to $26,000 per W2 employee. Have you applied for it? If yes, great! If not (or if your payroll company has been sitting on this for months), please read on.
The ERC is specifically designed to support impacted employers that continued to pay employees during early phases of COVID. Here’s the government’s one-pager about the ERC so you can hear about it straight from them.You qualify for the ERC in one of two ways: first, if your quarterly revenue went down in 2020 or 2021; or second, if your organization had to partly suspend operations due to COVID regulations – for example, if your offices were closed, if your services had to be canceled, or if your programs were capacity-limited. Even if you successfully moved your operations or church services online, you would still qualify because your work from the Before Times couldn’t continue.
How much can you qualify for? It depends on how many W2 employees your organization had, and how you were affected by Covid. The average is about $10,000 per employee, with a maximum of $26,000.
So, why am I doing this? For one thing, frankly, this work helps make my writing and teaching sustainable for myself and my family. But it’s also aligned with my principles. From the beginning, ‘Opti-Mystic Meditations’ has been about making spirituality practical, and seeing the spiritual in our everyday lives. This work is part of that. Because the ERC application process is confusing, folks leading churches and small businesses face a tough decision. On the one hand, this money can really help their communities. On the other hand, they’re rightly skeptical. Is this for real, or some internet scam? Very good questions — after all, working with someone on your taxes involves trust. Chances are, if you’re reading this, you know me. Maybe I know you. Jay and I will work with you each step of the way until you get your checks from the government. We’ll go as slow as you like, and answer any questions you have. That’s what makes this business work.
We’ve also gotten a number of understandable questions these past few months, questions you might share. Here they are:
You can get both PPP and ERC. In most cases, the PPP does decrease the amount of ERC you get, but doesn’t erase it. It’s a complicated calculation, but that’s why experts exist.
I hear you! Because there’s money involved, there are some shady operators in the business. But the ERC is real and it can make a huge difference to nonprofits in particular. Here’s what the IRS says about it.
Several reasons. First, you are running your organization, not monitoring developments in tax law. Second, the ERC in 2020 was quite limited, but in 2022, Congress expanded the law to literally quadruple how much money you could get – businesses and organizations are still finding out about it. And finally, the ERC filing process is complex and the IRS has not adequately publicized it.
Why can’t I file ERC myself, like I did with PPP?
Unlike PPP, the ERC rules and processes are quite complicated. You need to become familiar with the scope of executive orders in your state and municipality, tally and allocate qualifying wages and healthcare expenses to properly offset PPP received, and ensure that you exclude non-qualified parties while documenting the basis for your recovery or the IRS. But we can handle all this!
Shouldn’t my accountant be on top of this for me?
Because the ERC is complex, most accountants are not familiar with it (in particular, the PPP/ERC interaction) and justifiably don’t want to expose their clients to risk. In fact, we work with accounting firms who outsource this work to us.
Curious to hear more or see if you are eligible?
Comment below to reserve a spot with one of our (very patient and easy to talk to) specialists, reply in the comments, or email me at mike [at] mikemorrell [dot] org with any questions, direct to me. There are no upfront costs; you would only be paying us fees after you’ve received your funds.
If you were in ministry, business, or nonprofit work in 2020 or 2021, you owe it to yourself to see what’s available to you.
No comments yet.