A review of NCUA published call report data suggests that your credit union is eligible for significant federal stimulus funds under the Employee Retention Credit (ERC) provisions of the CARES Act and its successor legislation. These funds are a contribution to capital with no strings attached. They are clearly authorized by federal law and it seems in the best interest of every qualifying credit union to take advantage.
The ERC legislation provides federal funds to businesses, including credit unions, that have suffered significant declines in gross income as a result of the pandemic. In a nutshell, the way the law works for credit unions is as follows. If a CU has fewer than 500 employees, and if it has suffered a decline in gross income of 20% or more in any of the first 3 quarters of 2021 when compared to the same quarter in 2019, the CU is eligible for up to $7000 in federal funds per employee per qualifying quarter. There’s also a nuance in the law that allows a credit to look back to the previous quarter if it does not qualify based on the results of a quarter. The funds are obtained through the payroll tax process, by filing an amendment to Form 941 identified as a 941X.
Bob Fenner, retired NCUA General Counsel, and his colleague Darrell Smith, CEO of Highmark Companies, are working with credit unions to obtain ERC funds. They are currently working with over 35 CUs and have a 100% success rate. (Darrell’s company is also working with someone 150 other businesses and has developed unparalleled expertise in the stimulus law.) Their service includes determining eligibility, calculating your credit, preparing an audit-ready package with pro forma 941X, submitting the package to an independent accounting firm to provide an audit review, and working with you or your data processor to file with the IRS.
If you would like more information please contact Bob and Darrell via email at the following:
Darrell: [email protected]