Deadline nearing for newsrooms to take advantage of the employee retention tax credit

Originally passed in March 2020, ERTC benefits will begin phasing out March 12. But it’s not too late to submit an application. There is a series of qualifying criteria and the process can be quite exhaustive, many news organizations said they spent hours and weeks assessing their eligibility and benefits. That said, there are also services, like Easy Tax Credits launched by Zach Richner, that can expedite the process.

What: 

The employee retention tax credit was originally passed in the CARES act of March 2020. The tax credit is for wages paid to employees between March 12, 2020 and the end of 2021. 

Benefits:

For the first year — meaning quarters one through three of 2020 — employers can receive up to $10,000 per employee per year if the employer meets the above criteria and continues paying their employees. In the second year — the last quarter of 2020 and the first three quarters of 2021 — however, the benefit is up to $10,000 per employee per calendar quarter. 

The deadline for benefits is March 12, but it’s a rolling deadline. Meaning, as of March,   employers will become ineligible for benefits from quarter one of 2020, but are still eligible for other quarters. 

Eligibility: 

Commercial and nonprofit news outlets are eligible based on three criteria: 

1. If your news outlet experienced full or partial suspensions of operations due to government closures (Note: having to transition to remote operations wouldn’t necessarily qualify under this criteria.) 
2. If your news outlet experienced a decrease in revenue between the beginning of 2020 and 2021. For the quarters in 2020, organizations must show that their gross receipts were less than 50% as compared to the same quarter in 2019. For the quarters in 2021, organizations must show that their gross receipts were less than 80% as compared to the same quarter in 2019. The comparative quarters are always the same calendar quarter in 2019, regardless if eligibility is being calculated for calendar quarters in 2020 or 2021. 
3. If a news outlet launched after Feb.15, 2020, do not show an average of $1 million in gross receipts over the next three years and do not meet the above two criteria

News outlets could qualify based on any three of the criteria. However, if organizations qualify based on the third criteria, the one describing pandemic startup organizations, they qualify for benefits in each of the quarters, starting after they launched and ending at the end of the fourth quarter in 2021. Only startup organizations qualify for quarter four benefits in 2021.

If employers qualify based on the second criteria, however, they are eligible for benefits only if their gross receipts stay below the ratio outlined above as compared to the same quarter in 2019. 

Is it worth it: 

The process was tedious and time consuming. So said three publishers Rebuild Local News. And yet, all said it was worth it. For example, Aurora Sentinel was able to qualify for a $175,000 payment.

Zach Richner, who launched a startup that helps businesses take advantage of the ERTC, said the timeframe for receiving benefits varies on the size, typically. Based on his observations, if the amount is less than about $300,000 or $400,000, Richner said organizations usually see benefits in a couple months. If benefits come out to more than between $300,000 and $400,000, it can take up to a year. 

How to apply: 

Employers can submit form 941-X from the IRS. Newsrooms could also employ a firm like Richner’s Easy Tax Credits to do the initial audit and submit the ERTC application to the IRS. Easy Tax Credits takes a portion of the benefits, but the audits, Richner said, take about a week. Richner is also offering news organizations whose advertising staff refer small businesses to the service commission based on referral, called the Local Media Partner Program. 

For news organizations interested in getting on ERTC assessment, they can sign up for a free, no-obligation, ten minute call at easytaxcredits.com. For folks interested in joining the Local Media Partner Program, they should email mediapartners@easytaxcredits.com.