What is the Employee Retention Credit (ERC)?
- It is a refundable tax credit for businesses that continued to pay employees while shut down due to the COVID-19 pandemic or had significant declines in gross receipts from March 13, 2020, to December 31, 2021. Eligible employers can claim the ERC on an original or adjusted employment tax return for a period within those dates.
- This was introduced as part of the CARES Act and included tax credits for businesses to retain employees during the pandemic. The ERC is one of the single largest small business stimulus in U.S. history.
- It is a payroll tax refund from the United States Treasury Department applicable to businesses who kept employees on payroll during the pandemic.
- How will I know if I qualify? We suggest you watch this introductory video by Ministry Works. Link (the video is towards the bottom of the page)
How can I get help with the ERC from Ministry Works?
- NOTE: You don’t have to be a VCN church to work with Ministry Works.
- Go to this link.
- Click the “Claim your credit” button.
- Watch the video at the bottom of the page about the ERC.
- If you use Ministry Works as your Payroll Administrator -click here.
- If you do not use them as your Payroll Administrator – click here.
- You will be contacted by Ministry Works, who will tell you what forms to send them.
- They will fill out the application forms and package everything for you.
- If you qualify and they prepare the packet and send it to you, an invoice will be sent for a 5% fee.
- If you go through the process and find out that you are not eligible, no fee will be charged.
- For more information, contact Tyler Reinking at erc@ministryworks.com.
Who is Ministry Works?
- Ministry Works is a part of Brotherhood Mutual. They are a national partner with Venture Churches. Link here.
- Brotherhood Mutual provides services such as payroll administration, liability insurance, risk management assessment, employment practices, mission trip insurance and much more.
- Ministry Works is the Payroll Administration branch of Brotherhood Mutual. If you need payroll assistance click here.
Do pastors and clergy qualify?
- The employee retention credit does not apply to wages paid to ministers; the credit may still provide significant resources to churches.
- Most pastors and other clergy are exempt from federal payroll taxes (FICA). Employers pay no taxes on their behalf, and they may not be counted when calculating the Employee Retention Credit.
If I received the PPP loan, am I still eligible?
Initially, a business that received a PPP loan was not eligible for the ERC. Thanks to the Consolidated Appropriations Act of 2021, a business that received a PPP loan may also apply for the ERC retroactively back to 2020. However, wages reported as payroll costs for PPP loan forgiveness can’t be claimed for the ERC in any tax period.
Do I have to pay to this back?
Unlike PPP loan, this is not a loan. It’s funds to be used at your discretion for your business, and how you use it is up to you.
Are part-time employees eligible for the ERC?
An employer may include wages paid to part-time and full-time employees in calculating the ERC eligibility.
What wages qualify for the ERC?
Wages/compensation that are subject to FICA taxes, as well as qualified health expenses, qualify when calculating the employee retention tax credit. These must have been paid after March 12, 2020, and qualify for the credit if paid through September 30, 2021.
What does the IRS say about the ERC?
Is it too late to apply for the ERC?
- The statute of limitations for the 2020 ERC does not close until April 15, 2024.
- The statute of limitations for the 2021 ERCs does not close until April 15, 2025.