Questions ? Readers ask , an expert answers .
If a church only has one employee , does it qualify to participate in the PPP program ?
Eric Stenson : For one-employee institutions , the answer is yes , you could certainly qualify . We would want to make sure that there ' s wages available , and we would highly recommend contacting us so that we can walk through and make sure that there ' s available payroll .
How many quarters can I claim in 2020 ?
Stenson : The ERC program started on March 13 , which is Q1 . The IRS instructions say any credits that you want to take from Q1 to put on the Q2 return , qualify . So , when we file returns for our clients , we file Q2 , Q3 and Q4 for 2020 , even though we ' re using wages that start in Q1 of 2020 . For 2021 , we are currently filing Q1 of 2021 . And as time passes , we will file as Q2 , Q3 and Q4 , assuming COVID continues to impact churches .
We file no annual tax return and have no UBI ; only payroll taxes are paid . Does this process still work ?
Stenson : This particular credit and check that comes back to you is done against the payroll returns , so you don ’ t need to file an annual return . This was very intentional of Congress because they wanted to make sure that churches just like yours are able to claim these credits . They knew that many of them don ’ t file annual returns or file annual returns of zeros . I don ' t want to get too technical , but this is what ' s known as a fully refundable credit ; regardless of the amount of tax you ’ ve actually paid , you get a check back for the full amount of the credit . So , whether you ' ve paid $ 0 in taxes or a $ 1 million dollars in taxes , if you ' re entitled to $ 100,000 , you ' ve got $ 100,000 in a check .
What is the deadline for applying for ERC credits ?
Stenson : The current rules allow you to amend returns for up to three years . While there ’ s time , we advise people not to wait . If you consider PPP loans , for example , the program has not officially closed , but it has run out of money . So , certainly the earlier you get started , the better position your ministry or institution will be in terms of claiming . There is a bit of a lag from the time that we file those returns , to when the check actually arrives ; it can take 12 to 16 weeks . So , you certainly want to get started as quickly as possible .
Do individuals paid on a 1099 basis count ?
Stenson : Unfortunately , no — if you ' re paying a minister or if you have a musician you ' re paying on a 1099 basis , those wages won ’ t count . We can only collect for people who are actually employed by your institution and receiving W2 wages .
How do we get started with all this ?
Stenson : The best way is to email us and pass along your contact information . We have a very simple engagement letter . Once that ’ s signed , our staff accountants will work with you through the whole process . If you have any questions , you can call ( 602 ) 560-9393 or email
clients @ stentamtam . com .
— Reporting by Emma Green
32 CHURCH EXECUTIVE | JULY / AUGUST 2021