Non-profit organizations.

Building, growing, and managing a non-profit organization is not easy. The COVID-19 pandemic and related government shutdowns posed serious challenges for many non-profits throughout the United States. According to the National Council of Nonprofits, 75 percent of non-profit managers surveyed in one study reported that their organization had to make budget cuts at some point during the COVID-19 pandemic. The ERC offers an important benefit. You may have questions about how to qualify for the ERC as a non-profit organization. Here are two ways non-profits can qualify:

  1. A non-profit organization was subject to a full or partial suspension based on a government order  restriction causing a partial suspension such as below.  
  2. A non-profit organization suffered a major revenue decline during the pandemic.

It is important to emphasize that virtually every non-profit entity in the United States can qualify for the Employee Retention Credit (ERC) on the basis of a full or partial government shutdown. To be clear, non-profits do not need to prove any revenue loss for any quarter to qualify for an ERC tax refund. A partial government shutdown is sufficient. Examples of government shutdown orders that affected nonprofits include:

  • Additional cleaning requirements or sanitization requirements;
  • Social distancing regulations and capacity limitations;
  • Outright government shutdowns, including work-from-home rules; and
  • Supply chain disruptions.