Do You Qualify for the Employee Retention Tax Credit?

Find out with our 3-minute Quick Tests.

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

Here’s what you need to know.

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
  • 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 QUICK TEST

2021 ERTC qualifications

For 2021, the cap increases to up to $14,000 per employee ($7,000 per quarter for the first two quarters).

Here’s an overview of other 2021 changes:

  • The definition of operations suspended by government authority is expanded to include orders limiting commerce, travel, or group meetings due to COVID-19.
  • Employee numbers increase 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 June 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 $14,000 per employee for 2021.

TAKE THE 2021 QUICK TEST

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.

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

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