During these challenging times, many churches and religious organizations have struggled to maintain financial stability. The COVID-19 pandemic has resulted in a significant reduction in contributions and tithes, creating financial strain for these institutions. However, there is good news for churches in the form of the employee retention credit (ERC), a valuable relief program that can provide much-needed financial assistance.
The employee retention credit was initially introduced as part of the CARES Act in 2020 and has since been extended and expanded to provide additional relief to businesses and non-profit organizations, including churches. The credit is designed to encourage employers to retain their employees by providing a tax credit for wages paid to employees during the COVID-19 pandemic.
For churches and religious organizations, the ERC can be a lifeline to help cover payroll expenses and maintain their staff during these difficult times. The credit is calculated based on a percentage of qualifying wages paid to employees, up to a maximum of $10,000 per employee per quarter. This means that churches can potentially receive a significant credit to offset their payroll costs and provide financial relief.
It’s important to note that the ERC is not limited to churches with a specific size or number of employees. Any church that has experienced a decline in gross receipts or has been subject to government-mandated closures or restrictions due to the pandemic may be eligible for the credit. This makes the ERC accessible to a wide range of churches and religious organizations in need of financial assistance.
In addition to covering wages, the ERC can also be used to offset employer-paid health insurance costs, further reducing the financial burden on churches. This flexibility allows churches to use the credit to address various financial challenges they may be facing and prioritize the needs of their staff and congregation.
To take advantage of the employee retention credit, churches must carefully review the eligibility criteria and ensure that they are accurately calculating the credit amount. Working with a qualified tax professional can help churches navigate the complexities of the ERC and maximize their relief.
It’s essential for churches to be aware of the opportunities available to them for financial relief, especially during these uncertain times. The employee retention credit presents a valuable opportunity for churches to receive much-needed assistance to maintain their staff and continue their mission of serving their communities.
As churches strive to navigate the financial impact of the pandemic, the employee retention credit can provide a critical lifeline to help them weather these challenging times and emerge stronger on the other side. By exploring this valuable relief program, churches can proactively address their financial needs and ensure the continued support of their employees and congregation.