Employee Retention Tax Credit (ERTC) 2021

Jan. 1 - Dec. 31, 2021

ALL NEW FOR 2021 - CARES Act/ARPA Updates

• Program extended to 12/31/2021.
• Maximum credit is 70% of up to $10,000 in wages EACH QUARTER (max. $28,000/yr. per employee).
• Employer qualifies if a quarter's gross receipts in 2021 are down at least 20% from the same quarter in 2019.  See Sec. 207(d)(2) for more details.
• New in 2021, employers may request an advance on the credit in order to pay employees

Summary of the ARPA, March 2021 - 03/16/2021

Breaking Down the Changes....to ERTC - Forbes - 12/28/2020

Guide to Small Business COVID-19 Emergency Loans - US Chamber of Commerce - 12/22/2020

Check here for the IRS's most up-to-date information as it becomes available.

Employee Retention Credit 2020 - Expired 12/31/2020

IRS Q&A - ERTC

   **many of these measures have changed with the 2021 ERTC Program

• Any business in 2020 that:
  • had business operation fully or partially suspended as a result of government orders, or
  • experienced a decline in gross receipts by more than 50% in a quarter compared to same quarter in 2019.  Eligibility ends when gross receipts exceed 80% compared to 2019.
• Employers who receive a PPP loan are ineligible for this tax credit.
• Tax credit amounts to 50% of the first $10,000 compensation (including health insurance) for each employee (max $5,000 credit each employee).  
• Cannot be used on payroll expenses covered by any other program.  
• Credit applies to wages paid March 13 – December 31, 2020.
• The credit, which is awarded due to a significant decline in gross receipts, is available for the period beginning with any quarter in which your gross receipts are less than 50% of what they were in the same calendar quarter in 2019 and ending with the quarter that follows the first quarter beginning after the quarter in which your gross receipts were greater than 80% of what they were in the same calendar quarter in 2019.
• The credit is applied against the employer’s portion of payroll taxes.  IRS form 7200 can be submitted to receive the refundable tax credit as often as needed instead of waiting to file the quarterly form 941 for full reimbursement.

Disclaimer:  This is for informational purposes only.  Check with your accountant and/or banker for advice before proceeding with any business decisions related to the information posted here.