What Is The ERC?
The Employee Retention Tax Credit is a refundable tax credit for qualified wages paid in 2020 and 2021.
What Is The Credit Amount For 2020 And 2021?
For 2020, the tax credit is 50% of up to $10,000 of qualified wages for each employee, for all of 2020.
For example, if you paid qualified wages to an employee in Q3 and Q4 2020 of $8,000, the tax credit is $4,000. If you paid qualified wages to an employee in Q3 and Q4 2020 of $14,000, the tax credit is capped at $5,000.
For 2021, the tax credit is 70% of up to $10,000 of qualified wages for each employee for every qualifying quarter in 2021.
For example, if you paid qualified wages to an employee in Q1 2020 of $8,000, the tax credit is $5,600. If you paid qualified wages to an employee in Q1 2021 of $14,000, the tax credit is capped at $7,000.
Does My Company Qualify For The ERC?
Most private sector businesses that carry on a trade or business are eligible for the ERC. The qualifications are:
- Your business had operations that were partially or fully suspended during any calendar quarter in 2020 or 2021 due to orders from an appropriate governmental authority limiting commerce, travel, or group meetings (for commercial, social, religious, or other purposes) due to COVID-19; OR
- Experienced a significant decline in gross receipts during the calendar quarter of 2020 or 2021 (the significant decline threshold is 50% for any quarter in 2020 and 20% for any quarter in 2021)
The qualification on partially or fully suspended operations is where our knowledge of the changes to the ERC program can come into play. Give us a call or email if you feel like your business may have experienced a partial suspension/alterations of operations in 2020 or 2021.
What If I Received PPP Funding?
Your company is still eligible if your company qualifies based on the factors above. However, wages paid via the PPP funds will be exempt from the ERC. We will perform this analysis for you.
Is It Too Late To Claim The ERC For 2020 and/or 2021?
Not at all. In fact, for 2020, most businesses are amending tax forms to get their refundable Employee Retention Tax Credit. Our firm can assist you with this process.
Why Choose Aspire CPA Group To Assist You?
- We have experience in filing for and amending tax forms for the ERC credits for 2020 and 2021.
- We know the specific details about the ERC, having read and analyzed all the IRS guidance on the ERC.
- No upfront fees and a free review of your specific circumstance.
- We work directly with a law firm (specializing in small business tax credits) and create a detailed IRS support file for every client.
- US-based, local professionals. We have a staff of 3 that work on the employee retention credits full time and are available around the clock.
- Ease of communication. We will respond to any email or phone call within 24 hours.
Call Or Email Us Today For A Free Consultation