Education Industries

Virtually every educational institution in the United States could qualify for the Employee Retention Credit. Under federal guidelines, an educational institution must meet at least one of the following two eligibility criteria in order to qualify for the ERC tax credit:

1. The educational institution must have be at least partially shut down as a consequence of a federal, state, or local government order at some point during the quarter; or
2. The educational institution must have suffered a significant fall in revenue (gross receipts) in a quarter. For 2021, a significant decline in revenue is defined as a 20 percent drop compared to the last comparable pre-pandemic quarter.

The key thing to understand is that the term “partial government shutdown” is defined broadly. Indeed, it is easier for most educational institutions to qualify on the grounds of a government shutdown than for a loss of revenue. Examples of government orders that let educational institutions qualify for the ERC include:

• Enhanced cleaning and sanitizing requirements;
• Social distancing regulations;
• Capacity restrictions;
• Remote learning requirements;
• Supply chain disruptions; and
• Complete shutdowns of operations.

We Serve All Types of Educational Institutions (For-Profit and Non-Profit)

Child Care Centers (Daycare): Child care centers saw some of the more pronounced adverse effects from the COVID-19 pandemic. A stunning and alarming report from the United States Chamber of Commerce found that three-quarters of childcare/daycare centers were not even breaking even in 2020 and 2021. There were heightened cleaning/sanitizing requirements, social distancing and capacity rules, frequent shutdowns due to virus outbreaks, and many parents pulling kids from facilities.

• All Schools & Universities: Schools and universities also saw major disruptions during 2020 and 2021. The National Center for Education Statistics (NCES) reports that nearly 90 percent of college students were taking remote classes during the height of the pandemic restrictions. Schools, colleges, and universities can all file for the ERC.
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• Tutoring Schools: Independent schools can apply for and receive a tax refund through the ERC. Independent schools include all types of tutoring programs. Many schools, businesses, and organizations that offer tutoring services were disrupted by the COVID-19 pandemic and the government shutdowns. Tutoring schools are eligible to file for the ERC that is the same as any child care center, private school, or public university. Any business that employs tutors and meets ERC eligibility standards—which virtually all educational institutions do—can qualify.
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• All Trade Schools: A trade school is generally a very hands-on environment. The remote learning imposed by COVID-19 created immense challenges for trade schools. They also had to deal with cleaning and sanitizing standards as well social distancing/capacity regulations. Trade schools throughout the United States can apply for and receive the ERC tax credit.