EMPLOYEE RETENTION CREDIT
DID YOU RECEIVE PPP #1 OR PERHAPS ARE APPLYING FOR PPP #2?
NOW THERE IS EVEN MORE CASH AVAILABLE FOR COMPANIES AFFECTED BY COVID-19.
ACT NOW…GET IN THE IRS REFUND QUE BEFORE THE RUSH HITS!!
On December 27th, the second Coronavirus relief package was signed into law. This law contains significant enhancements to the Employee Retention Credit (ERC) enacted under the CARES Act!
ERC is Available even if Company Received PPP Loan
Under the CARES Act, a company that received a Paycheck Protection Program (PPP) loan was not eligible for the ERC. However, the new law states that a company that receives a PPP loan is no longer prohibited from claiming the ERC; however, an ERC may not be claimed for wages paid with the proceeds of a PPP loan that have been forgiven (no double-dipping). This change is retroactive for wages paid after March 12, 2020, which means a company that received a PPP loan in 2020 and paid qualified wages in excess of the amount of the forgiven PPP loan used to pay wages is also eligible to claim the ERC in 2020.
Eligibility for the ERC
For the final three quarters of 2020, companies are eligible for the ERC if, in any quarter, their gross receipts were less than 50% of their gross receipts in the same quarter in 2019 OR if they had operations that were either fully or partially suspended by a government order related to COVID-19.
For the first two quarters of 2021, companies are eligible for the ERC if, in either quarter, their gross receipts were less than 80% of their gross receipts in the same quarter in 2019 (or if their gross receipts for the prior quarter were less than 80% of their gross receipts compared to the corresponding quarter in 2019) OR if they had operations that were either fully or partially suspended by a government order related to COVID-19.
Period Available and Amount of ERC
The ERC is currently available for wages paid from March 12, 2020 through June 30, 2021. For 2020, the amount of the ERC is equal to 50% of the qualified wages paid to an employee and it’s capped at $5,000 per employee. For 2021, the ERC amount is increased to 70% of qualified wages paid to an employee and it is capped at $7,000 for EACH of the first two quarters. In all, companies could receive as much as $19,000 per employee for 2020 and 2021.
Our ERC Services experts, made up of attorneys and CPAs, track the thousands of federal, state, local and county orders related to COVID-19 and form legal positions documenting qualification for full or partial suspensions, in addition to calculating and capturing the credits and providing IRS audit defense.