Do You Qualify for the Employee Retention Tax Credit?

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

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.

Here’s what you need to know.

2021 ERTC qualifications

For 2021, the cap increases to up to $28,000 per employee ($7,000 per quarter).

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 December 31, 2021.
  • The maximum of qualified wages increases to $10,000 per employee per quarter with a 70% tax credit rate – for a maximum of $28,000 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 well over 100 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

What Our Clients Say

“I love communication: Matt exceeded all my expectations in this process. The PPP loan process he used was seamless, easy, and efficient.”

– Bernard M., Barnes Dennig Client

“Always quick on email response but also reached out in the midst of COVID to see how our business was doing and provided details on the PPP loan.”

– Barnes Dennig Client, 2020

“It was challenging to decipher all the government benefits in relation to COVID-19. Our Barnes Dennig representatives took time to meet with us on several occasions to explain the options and provide their deep analysis, so we could make the best decisions for our organization.”

– Jen A., Business Operations Director