ERTC Funding: ASAE Asks IRS to Resolve ERTC Delays
In a letter earlier this month, a coalition of associations and other nonprofits urged the IRS to ensure they have access to the ERTC, which has helped many of these groups keep their doors open during the pandemic.
Earlier this month, ASAE joined a broad coalition of associations and other nonprofits in a letter to the IRS, urging the agency to ensure that American businesses and nonprofits get timely access to the Employee Retention Tax Credit (ERTC) created by Congress during the pandemic.
Along with the Paycheck Protection Program (PPP), the ERTC has been a critical lifeline for small businesses and nonprofits to keep their doors open and employees on payroll during the difficult economy resulting from the COVID-19 pandemic. The ERTC provides eligible employers up to $7,000 per employee per quarter in refundable tax relief for the first three quarters of 2021.
Eligible businesses and tax-exempt groups can still apply for the ERTC on an amended return, and many have done just that. But the IRS has acknowledged significant delays in the disbursement of ERTC funds, and as of Aug. 31, had a backlog of 207,000 unprocessed claims.
“With most recipients having long since expended their Paycheck Protection Program (PPP) loans, our employers have depended on the ERTC as one of the few pandemic-related financial support programs,” the coalition said in its letter to the IRS. “Unfortunately, the IRS’s languid implementation of the ERTC undermines the ERTC’s purpose to function as an immediate form of financial relief.”
The IRS recently received an influx of $80 billion in new funding through the Inflation Reduction Act signed into law this summer. Much of the additional money is meant for enforcement, but Treasury Secretary Janet Yellen did direct the IRS this summer to clear the backlog of filings to be processed, including the ERTC.