The Employee Retention Tax Credit (ERTC) is a valuable tax break that was extended and modified by the American Rescue Plan Act (ARPA), enacted in March of 2021.

ERTC for the 2020 year!

  • 50% Credit for $10K of wages per year per employee
  • Cannot claim the same wages for ERTC and PPP forgiveness
  • Calculated per employee and per quarter
  • Need to qualify the business quarter each year
  • Credits on Form 941 to claim credits for 2020
  • Wages include group health plan expenses

If qualified based on the suspended business operations, only wages paid durin gthe suspended period will qualify. It is possible to qualify under both the suspended operations and the quarterly gross test, in which case, use the wages for the entire quarter.

Special rules apply to a business not fully operational all of 2019.

Significant uncertainty exists regarding how PPP expenses and ERTC wages interact, especially if PPP forgiveness has already been submitted for PPP loan.

ERTC for the 2021 year!

  • 70% Credit for $10K of wages per quarter
  • Cannot claim the same wages for ERTC and PPP forgiveness
  • Calculated per employee and per quarter
  • Need to qualify the business each quarter
  • Credits on Form 941 to offset payroll taxes, refundable credit
  • Available for wages paid Q1 and Q2 of 2021
  • Wages include group health plan expenses

If qualified based on the suspended business operations, only wages paid durin gthe suspended period will qualify. It is possible to qualify under both the suspended operations and the quarterly gross receipts tests, in which case, use the wages for the entire quarter.

Special rules apply to a business not fully operational all of 2019.

Significant uncertainty exists regarding how PPP expenses and ERTC wages interact, be especially carefull planning for use of 2021 ERTC if a PPP Second Draw is obtained.

Answer the questions below to see if you might be eligible!