ERTC Tax Benefits for Artists, Musicians, and Creatives

September 15, 2023
Dayes Law Firm

People may forget that it wasn’t just essential businesses that got people through the pandemic.

It was art, too. People turned to music, art, and media to cope with quarantine. And yet, artists, musicians, and other creative professionals are often left out of the conversation surrounding COVID relief like the ERTC.

ERTC for artists may not be a discussion as prominent as ERTC for other industries, but it’s important that artists know their options.

What Is the ERTC? 

The Employee Retention Tax Credit (ERTC) is a refundable payroll tax credit that employers can file against employment taxes. The purpose of this credit was to incentivize employers to keep employees on their payroll and give them the resources to do so. 

The 2020 credit period applies to wages paid between March 12, 2020, and January 1, 2021. To qualify for the ERTC in 2020, your business had to:

  • Experience a suspension of regular operations because of government orders to shut down or reduce hours
  • Experience a 50% loss in revenue when comparing the same quarters in 2019

The 2021 credit period applies to wages paid between January 1, 2021, and September 30, 2021. To qualify for the ERTC in 2021, your business had to:

  • Experience a suspension of regular operations because of a government-mandated shutdown or reduction in hours
  • Experience a 20% loss in revenue when comparing the same quarters in 2019

The Evolution of the ERTC

To understand how artists and creative professionals may be eligible employers for the ERTC, learning about its evolution is essential.

The government introduced the ERTC through the Coronavirus Aid, Relief, and Economic Security (CARES) Act in March 2020. Originally, the credit only covered up to $5,000 per employee, and it defined small businesses as having 100 or fewer employees. This initial version of the credit also prohibited any businesses that had received PPP loans from filing for the credit.

In December 2020, the Taxpayer Certainty and Disaster Relief Act expanded the credit to include businesses that saw a 20% decline in gross receipts, not only businesses that suffered a 50% decline. 

It also allowed businesses that collected PPP loans to file for the ERTC, as long as employers didn’t double dip. The definition of small businesses expanded to include those with fewer than 500 full-time employees.

The American Rescue Plan Act of 2021 extended the ERTC period through the first three quarters of 2021. 

How Does the ERTC Help Creative Professionals?

ERTC is available for a variety of creative professionals. 

Studios and Organizations 

Do you own a studio where you teach or celebrate art? Dance and art studios can file a claim for the ERTC if they experienced a suspension of regular activity or a significant loss in revenue. Orchestras and other artistic organizations can also file a claim under these qualifications for qualified wages. 

Artistic Nonprofits

Nonprofit organizations and charities that support the creation and education of the arts can file a claim for the ERTC. If you own a nonprofit, you may claim the ERTC for wages you paid in 2020 and 2021. 

Self-Employed Artists

Unfortunately, you cannot file a claim for the ERTC if you’re a self-employed artist. Employers can only claim the wages of their employees, not their own. 

Claiming the ERTC as a Creative Professional

The ERTC for artists can make a world of difference in your finances. If you’re a creative professional and qualified employer, Dayes Law Firm may be able to help you file for the ERTC. 

Dayes Law Firm has an experienced team of ERTC recovery lawyers ready to help you through this process. Contact us at 866-567-4510 for a free consultation.