IRS Issues Ruling on Federal Credit Unions and COVID Credit

WASHINGTON–The Internal Revenue Service has issued a ruling that credit unions can receive a 2021 COVID Credit, but not 2020.

In other words, federally chartered CUs can’t claim the employee retention credit for periods in 2020 but can do so for periods in 2021, because later amendments to the terms of the credit made them eligible, according to the IRS.

Specifically, FCUs can’t claim the credit for wages paid after March 12, 2020, and before Jan. 1, 2021.

The ruling was issued by the IRS Office of Chief Counsel in a newly released legal memorandum.

According to the IRS, FCUs are able to claim the credit for wages paid after Dec. 31, 2020, and before Oct. 1, 2021, the IRS said.

The Employee Retention Credit (ERC) – sometimes called the Employee Retention Tax Credit or ERTC – is a refundable tax credit for businesses and tax-exempt organizations that had employees and were affected during the COVID-19 pandemic.