The Coronavirus Aid, Relief, and Economic Safety (CARES) Act provided economic relief to businesses and individuals. The stimulus package, which made $370 billion in funding available to small businesses, contained a provision allowing certain employers to claim a tax credit for retaining employees during the pandemic.
The employee retention tax credit (ERTC) allows eligible employers to take a payroll tax credit for retaining employees during the pandemic. For 2020, eligible employers can claim a credit against fifty percent of wages paid per quarter. The maximum credit is $5,000 per employee for 2020. For 2021, eligible employers can claim a credit against seventy percent of wages paid per quarter. The maximum credit is $21,000 per employee for 2021.
How To Qualify
Qualification for the ERTC is through one of two ways: First, where most will qualify, is the nominal business impact test, which incorporates over 10 areas where your business may have been impacted. The second way is if the business suffered a significant decline in revenue compared to the same quarter in 2019. For 2020, the decline in revenue must be equal or greater than 50%, and for 2021, a decline of 20% or greater compared to the same quarter in 2019.
Many businesses were initially told they did not qualify; however, things have changed, specifically with the nominal business impact criteria. Our law firm is reviewing ERTC claims and will work with you to calculate the expected credit. This opportunity is time sensitive and will not be available indefinitely. Please click here to learn more and contact us so we can help you.