American Church Group - Colorado

Thousands in Relief Funding Available to Ministries Through the Employee Retention Credit

We know a lot of ministries were significantly impacted by COVID-19 in 2020 and may still be feeling the effects today. Most ministry leaders don’t realize there is funding available to non-profit employers including churches, schools, colleges, and camps.

Our agency wants to make sure you're aware that your ministry may qualify for up to $33,000 per employee through the Employee Retention Credit (ERC). Below are some highlights about the credit and guidance on where to start to see if your ministry is eligible.

What is the ERC?

The Employee Retention Credit (ERC) is a fully refundable payroll tax credit for eligible employers. It was initially created by the 2020 CARES Act to encourage businesses to keep employees on their payroll during widespread business interruptions caused by the pandemic.

The Tax Relief Act of 2020 makes the ERC available to employers even if they received PPP loans, as long as PPP funds are not used to calculate the credit. The American Rescue Plan Act of 2021 extended the ERC through December 31, 2021.

Eligible organizations can receive a tax credit of up to $5,000 per qualified employee in 2020 and up to $28,000 per qualified employee in 2021.

Note: This tax credit cannot be claimed for pastors and clergy, because they are exempt from the federal employment taxes (FICA), upon which the credit is based.

Does My Ministry Qualify?

Eligible employers include businesses and tax-exempt organizations that experienced EITHER ONE of these situations:

• Partially suspended operations between March 13, 2020, and December 31, 2021, because of a government order limiting commerce, travel, or group meetings due to COVID-19.
• A significant decline in gross receipts in any calendar quarter, compared to the same quarter in 2019.

Seek the Credit for Your Ministry

Check out the Ministry Guide to Claiming the Employee Retention Credit on the MinistryWorks® website to learn more about how to qualify. If you qualify, the MinistryWorks team can also help your ministry claim the credit. They’ve already helped more than 400 ministries. On average, the organizations they’ve helped are claiming about $93,000.

MinistryWorks by Brotherhood Mutual is a payroll and payroll tax-filing service created to help churches and related ministries save time and money so they can focus on building the Kingdom.

*The above blog post is intended to be helpful, but does not constitute legal advice nor tax advice, and is not a substitute for legal advice from a licensed attorney or tax advisor in your area.

*We encourage you to consult with a licensed attorney and/or tax advisor in your jurisdiction to determine how local, state and federal law applies to your specific circumstance.