WASHINGTON—With a request that it “fix an oversight” to the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) when marking up the tax proposal announced earlier last week, America’s Credit Unions has sent a letter to the House Ways and Means Committee and Senate Finance Committee.
“The CARES Act unintentionally prohibited the Employee Retention Tax Credit (ERTC) for federally chartered credit unions for tax year 2020, an error, making these credit unions one of the only ineligible private sector businesses,” ACU said.
In the letter, ACU President/CEO Jim Nussle called the issue a “matter of simple fairness,” as state-chartered credit unions are eligible to receive the credit for 2020.
‘Not the Intent’
As federal credit unions are not-for-profit cooperatives under Section 501(c)(1) of the Internal Revenue Code, they are classified as “federal instrumentalities” in the CARES Act. The congressional intent to the ERTC was to block quasi-governmental entities from accessing this payroll credit, not federally-chartered credit unions, America’s Credit Unions said.
The letter can be found here.
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