Initially, the AICPA was not sure if churches qualified for the ERC, thus we waited until further guidance was released before recommending that churches apply. If you experienced a significant decline in gross receipts (more than 50%, per quarter) or fully or partially suspended any significant part of operations due to a government mandate (including capacity limitations) during any calendar quarter since the pandemic began, you may be eligible for the ERC (even if you also received a PPP loan, but not on the same wages if the PPP loan was forgiven).
The credit can be claimed on payroll paid between March 13, 2020 through December 31, 2021. The credit is claimed against certain 941 payroll taxes. Note: If you do not withhold FICA taxes on ministerial wages, these wages are not eligible for the ERC.
If you feel you may qualify, you have up to three years to amend form 941 to claim the credit and receive a refund. Due to the complexity of the qualifications, we recommend that you contact your church attorney and accountant to verify you qualify and to file the amended returns. Note that further guidance is expected from the IRS which may change this recommendation.