WHAT IS THE EMPLOYEE RETENTION CREDIT (ERC)?
The Employee Retention Credit under the CARES Act encourages businesses to keep employees on their payroll. The refundable tax credit is for qualified wages paid by an eligible employer whose business has been financially impacted by COVID-19.
The Employee Retention Credit is a refundable federal payroll tax credit available to eligible employers equal to 50% of qualified wages up to $10,000 per employee paid from March 12, 2020 to December 31, 2020 and 70% of qualified wages up to $10,000 per employee per quarter in 2021.
WHO IS ELIGIBLE FOR ERC?
Businesses that operated in 2020 and 2021 and experience either:
- For 2020, experience a decline in gross receipts by more than 50% in a quarter compared to the same quarter in 2019 (eligibility ends when gross receipts in a quarter exceed 80% compared to the same 2019 quarter)
- For 2021, experience a decline in gross receipts by more than 20% in a quarter compared to the same quarter in 2019
- Partial or full suspension of operations as a result of orders from a governmental authority due to COVID-19
WHAT ARE QUALIFIED WAGES?
- Qualified wages are wages, including allocable health plan expenses, paid to employees during the period of the decline in gross receipts or the period that operations were suspended
- Wages used for PPP Loan Forgiveness or for other payroll tax credits are not eligible
WHO CAN HELP?
We are referring anyone who asks about ERC to Richardson Kontogouris Emerson LLP (RKE). They are based in our local South Bay community and are happy to discuss your unique facts and circumstances. They will work with you to maximize your Employee Retention Credits in conjunction with your PPP loan forgiveness. No matter your location, they can help you. For the quickest access to a team member email my girl Charmaine. Charmaine.Baird@rkellp.com … Let her know you were referred by Accounting Therapy.