EMPLOYEE RETENTION TAX CREDIT
Delaney CPA has extensive knowledge and experience claiming the Employee Retention Tax Credit (ERTC).
What is the ERTC?
The Federal Government during the COVID-19 pandemic issued credits to employers with payroll for the 2020 and 2021 tax years. These credits can still be claimed for 2020 until April 2024! The credit for 2021 can be claimed up until April 2025!
How much is the credit?
It depends on the quarter for which you want to claim the credit. For 2020 you can claim up to $5,000 per employee depending on their wages for the quarter. For 2021, your business might be entitled to receive a credit of $7,000 per employee per quarter.
Who qualifies to receive the credits?
There are two ways to qualify for the 2020 (and 2021) credit:
Full or partial suspension of operations due to government order due to COVID-19 during any quarter, or
Significant decline is gross receipts (50% for 2020; 20% for 2021) in any quarter when compared to the same corresponding quarter in 2019.
For the first three quarters in 2021 the Federal Government was more generous to businesses. They made it easier to qualify based on the gross receipts test, but that's not all! They increased the credit from $5,000 per employee per year to $7,000 per employee per quarter. That means you could receive a credit of $21,000 per employee for 2021.
Did you start a business during the pandemic? Your business might also qualify!
There are many regulations and calculations associated with this credit. For example, did you know that PPP and ERTC are linked? You can claim both! However, you need to know how to apply your wages to claim the credit and also qualify for full forgiveness of your PPP loan.
Call us today to see if you qualify!