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Bipartisan ERTC Relief Update

February 24, 2022 6:20 AM | Chelsey Blakenship (Administrator)

2/22/22 Update:

We need your help! We need your stories on why restoring the employee retention tax credit (ERTC) for the last three months of 2021 is important to your organization. The ERTC was created by the CARES Act in 2020 to help companies and nonprofit organizations keep employees on payroll during the COVID-19 pandemic. Though it was set to run through 2021, Congress ended the ERTC early to help defray some of the costs of last year’s bipartisan infrastructure legislation. Please email your stories by February 28 to shelly@impactmanagement.com

Senators recently introduced the bipartisan Employee Retention Tax Credit Reinstatement Act (S. 3625), a bill that seeks to retroactively restore the refundable tax credit for the fourth quarter of 2021. The bill’s principal sponsors are Senators Hassan (D-NH) and Scott (R-SC). The business and nonprofit coalition issued a joint news release in support of the legislation. Tim Delaney, President & CEO of the National Council of Nonprofits, said, “The Employee Retention Tax Credit is, and has always been, a disaster relief provision designed to help employers keep workers on the payroll during trying times.” He warned that without swift passage of the bill and the restoration of the ERTC for the fourth quarter of 2021, “layoffs at community-based nonprofits will be necessary, harming the economic recovery and causing a reduction in the vital services our fellow residents need.” The Senate bill is a companion to the bipartisan legislation (H.R. 6161) introduced in December by Representatives Miller (R-WV) and Murphy (D-FL).

See Employee Retention Tax Credit For Nonprofits Has A Chance, The NonProfit Times, Feb. 22, 2022.

2/9/22 Update:

The set of Senate sponsors of the Employee Retention Tax Credit Reinstatement Act is now official. The bipartisan bill will be introduced on Thursday, Feb. 10 with these sponsors/cosponsors: Senators Hassan (D-NH), Tim Scott (R-SC), Warner (D-VA), Capito (R-WV), and Cardin (D-MD). The first three Senators are members of the Senate Finance Committee, which has jurisdiction over the ERTC; Senator Cardin is also on Finance, but importantly is Chair of the Small Business Committee and is putting together a pandemic relief package to help employers. This article in Roll Call yesterday lays out the background and some insights into the thinking of key Senators: Democrats mulling revival of employee retention tax credit, Laura Weiss, Roll Call, Feb. 7, 2022.

Advancing H.R. 6161: Efforts continue to promote Employee Retention Tax Credit Reinstatement Act, H.R. 6161, the bill that would restore eligibility for the ERTC for the fourth quarter of 2021. The list of House Cosponsors has grown to 53 from 23 states so far, which includes 29 Republicans and 24 Democrats. Also, the list of organizations endorsing the legislation is growing. The updated ERTC coalition Letter in support of H.R. 6161 now has 68 national organizational signers, 40 of which represent charitable nonprofits. Organizations large and small are urging Congress to restore the ERTC through the end of the year, as laid out in the recently introduced Employee Retention Tax Credit Reinstatement Act (H.R. 6161).

The coalition letter has been sent but will be updated regularly as more organizations sign on. Go here to sign your organization onto the letter.

1/12/22 Update:

In December, a bipartisan group of Representatives introduced the Employee Retention Tax Credit Reinstatement Act (H.R. 6161) to restore the important incentive. See the news release and current list of nonprofits and other employers endorsing the legislation.

12/14/21 Update:

The Build Back Better bill currently does not include reinstatement of the Employee Retention Tax Credit, a high priority of the charitable nonprofit community and a benefit that was eliminated for the fourth quarter of 2021 by way of the bipartisan infrastructure bill signed into law on November 11. Nonprofits have been counting on the refundable payroll tax credit of up to $7,000 per employee this quarter to afford to retain staff and avoid additional layoffs. Representatives introduced the Employee Retention Tax Credit Reinstatement Act (H.R. 6161) to restore the important incentive.

See the news release and current list of nonprofits and other employers endorsing the legislation.

Contact your Representatives (Twitter handlesemailtelephone and urge them to cosponsor H.R. 6161 to restore this important refundable payroll tax credit. Learn more about the issue and go to this Take Action page for more ideas.

11/30/21 Update:

With the enactment of the Infrastructure Investment and Jobs Act, nonprofit and other employers retroactively lost access to the Employee Retention Tax Credit (ERTC) for the fourth quarter of 2021. The repeal of the credit halfway through the quarter could subject employers to penalties and other liabilities that would not have applied had the ERTC remained in effect. What has been a lifeline for many nonprofits during the pandemic, the loss of the ERTC for Q4 may exacerbate nonprofit worker shortages, leaving many in communities without needed services.  The National Council of Nonprofits sent a letter to the IRS urging the agency to announce that employers will not be penalized for using the ERTC in the first half of this quarter (that started on Oct. 1) and provide other relief. An IRS official is quoted as saying: “Rest assured, we are aware of this problem. We were aware of the problem when we saw the legislative language.” Clarifications could be issued this week.

 
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