How to Qualify for the Employee Retention Credit

Provided by the federal CARES Act, the ERC continues to provide a wide variety of employers with lucrative refundable payroll tax credits for qualified wages paid to employees in 2020 and 2021. This Employee Retention Credit is worth up to a maximum credit of $5,000 per employee for 2020 and $7,000 per employee each quarter in 2021.

What are the ERC Qualifications?

The ERC can be a tremendous financial help for small businesses, but there are certain qualifications that businesses must meet in order to be eligible.

How Companies Qualify for the Employee Retention Credit

To be eligible for the ERC, your business must have been impacted by either a government-mandated lockdown or a drop in revenue.?

• If your business was impacted by a full or partial suspension of operations because of a government COVID-19 order during any quarter, you can qualify. This includes restrictions on hours or capacity.
• Your business can also qualify if it experienced a “significant decline” in gross receipts as defined by the IRS. For tax year 2020, a significant decline means gross receipts for a quarter are less than 50% compared to the same period in 2019. For the first 3 quarters of 2021, it means quarterly gross receipts are less than 80% compared to the same period in 2019.

A recovery startup business, which is one that began after February 15, 2020, may also qualify depending on its gross receipts.

Here's a Snapshot of ERC Qualifications:

1. Number of employees

• Tax year 2020: 100 or fewer employees
• Tax year 2021: Fewer than 500 employees

2. Impacted by pandemic and meet one of the following conditions:

• Reduced revenue in 2020 or 2021 resulting from government mandates
• Drop in revenue
• Tax year 2020: less than 50% of 2019 receipts
• Tax year 2021: less than 80% of 2019 receipts

Your Next Step: Find Out if You're Qualified for ERC Funds

Our team of experts is available to help you to find out if you would be qualified for the ERC. ?? Call us now to speak with a licensed tax agent 866-900-9001 -- or send a message for a free consultation:?https://taxresolutionplus.com/contact.html

Here's what one of our clients recently said about working with us on their ERC claim: