ERC Tax Credit - Will Your Business Qualify? | Barnes Dennig

Do You Qualify for the Employee Retention Tax Credit?

You might be surprised. Find out in 3 minutes or less.

TAKE THE 2021 QUICKTEST

Please note: The QuickTest works best for organizations with at least one full-time employee – it doesn’t work well for most sole proprietors.

The expanded Employee Retention Tax Credit (ERTC) provides welcome relief for businesses and organizations hardest-hit by the global pandemic. Optimizing the credit for the best possible impact can be complex – especially if you have FFCRA or other wage-based credits.

Please note – we thoroughly evaluate each client’s situation, providing sound analysis and support for the ERTC refunds we prepare.

Learn more in our 21-minute ERTC master class video.

Here’s what you need to know.

2021 ERTC qualifications

For 2021, the cap increases to up to $21,000 per employee ($7,000 per quarter for Q1-Q3).

Here’s an overview of other 2021 changes:

  • The definition of operations suspended by a government authority is expanded to include orders limiting commerce, travel, or group meetings due to COVID-19.
  • The government order suspension is expanded to include suppliers that provide a key component of your product being partially or fully suspended due to a government order.
  • Essential businesses may qualify for the credit if one of their operations or one of their affiliates was fully or partially suspended by a government order.
  • Employee numbers increased to 500 or fewer (up from 100 or fewer) and more than 500 (up from more than 100).
  • If the business experienced a 20% reduction in gross receipts compared to the same calendar quarter in 2019 (Not 2020!) – you also have the option to compare the immediately preceding quarter to the corresponding quarter of 2019.
  • Qualified wages must be paid between January 1, 2021, and September 30, 2021.
  • The maximum of qualified wages increases to $10,000 per employee per quarter with a 70% tax credit rate – for a maximum of $21,000 per employee for 2021.

TAKE THE 2021 QUICKTEST

2020 ERTC qualifications

For 2020, the ERTC is capped at $5,000 per employee. You may qualify for the 2020 ERTC if:

  • Operations were fully or partially suspended by a government order, or
  • A supplier that provides a key component of your product was partially or full suspended due to a government order, or
  • An essential business had one of its operations or one of its affiliates fully or partially suspended by a government order, or
  • Gross receipts were less than 50% compared to the same quarter in 2019, or
  • You experienced a decline in gross receipts of 20% or more during the first two quarters of 2020 compared to the same two quarters in 2019

TAKE THE 2020 QUICKTEST

NOTE: Obtaining a PPP loan does NOT disqualify you from the ERTC. And, credits for 2020 can be obtained retroactively – it’s not too late!

What happens next?

A member of our COVID-19 Advisory Team will review your Quick Test results and contact you with recommendations and next steps.

The Barnes Dennig COVID-19 Advisory Team has prepared analyses for hundreds of taxpayers – and the deliverable we provide you includes calculations and underlying support of the calculations. Plus, we prepare the amended 941s requesting the tax refund – signed by a CPA.

Timing is everything – true-up calculations are due just days after the quarter’s last payroll. Working with a qualified tax professional can give you the peace of mind you need to focus on the future. Take the Quick Test now.

Barnes Dennig COVID-19 Advisory Team

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