BUSINESS SOLUTIONS INC

Employee Retention Tax Credit (ERTC)

Businesses with employees that were either partly shut down due to COVID 19 or suffered a loss of business in 2020 or 2021 are eligible for the Employee Retention Tax Credit. We provide everything needed to prepare and file the forms necessary to claim your credit.

Find out if you are eligible for the ERTC up to $33k per employee for the year 2021. File now and receive your credit in as little as 10 weeks -12 Weeeks

The ERTC rules are complicated, confusing, and inconsistent, and there is some important detailed guidance from the IRS, which is missing on how to apply the new rules. That said, if you think you may qualify for the ERTC, you should talk to a tax professional who is versed in the rules (there unfortunately aren’t many), and file a retroactive credit for 2020, and/or make sure to claim the credit for Q1 and Q2 of 2021 if you qualify.

Even if You’ve Received PPP Funds, You’re Likely Eligible for the Employee Retention Tax Credit

On March 11, 2021, Congress passed the American Rescue Plan Act that expanded and extended the Employee Retention Credit (ERC), and President Biden signed it into law.

So, what’s that mean for you and your business? Even if you’ve already gotten PPP funds, you can take advantage of the increased savings with the Employee Retention Credit for 2021.

We provide transparent guidance, assistance, facilitation, fixed pricing and completed end-to-end deliverables. Contact us today to discuss how we can help you keep more of your money

What Does the ERC for 2021 Mean for Your Business?

For Business owners, it means that for every employee on your payroll in 2020, you can receive up to $5,000 tax credit, whether you received PPP funds or not.

And it gets better. New provisions increased the credit amount to $7,000 for all four quarters in 2021, for a total of $28,000 per employee!

IN SIMPLE WORDS, ENTITIES WHO HAVE EMPLOYEES and ARE ON PAYROLL, MUST FILE FOR THE ERTC.

Which Employers are Eligible for the Employee Retention Tax Credit?

An eligible employer is an employer that actively carries on a trade or business during calendar year 2020 or 2021, including tax-exempt organizations, and meets either of the two following tests:

Government Order Test: An employer is an eligible employer if it experiences a calendar quarter “in which the operation of the trade or business is fully or partially suspended during the calendar quarter due to order from an appropriate government authority limiting commerce, travel or group meetings (for commercial, social, religious or other purposes) due to COVID-19.”
Reduced Gross Receipts Test: An employer is an eligible employer if it experiences a significant decline in gross receipts.
- For 2020, a significant decline in gross receipts is defined as a decline in gross receipts of at least 50 percent in any calendar quarter in 2020 when compared to the same calendar quarter in 2019.
- For 2021, a significant decline in gross receipts is defined as a decline in gross receipts of at least 20 percent in any calendar quarter in 2021 when compared to the same calendar quarter in 2019.
  - If this test is failed, a special rule for 2021 allows the eligible employer to use the gross receipts in the fourth quarter of 2020 compared to the same quarter in 2019 to determine a gross receipts decline of greater than 20 percent.
Gross receipts include all receipts received, regardless of whether the amounts are derived in the ordinary course of the taxpayer’s trade or business. It is important to note that PPP loan forgiveness is included in gross receipts

It’s also important to note that there are affiliation rules that apply to commonly owned businesses which could impact eligibility for the credit.

HOW DO I KNOW IF I QUALIFY FOR THE EMPLOYEE RETENTION TAX CREDIT?

This is where it gets tricky. The rules are complicated and confusing…and they differ between 2020 and 2021. Overall, whether you qualify and how you calculate the amount is based on 3 things:

-The average number of full-time employees you had in 2019

-Whether you had a quarter-over-quarter gross receipts decline between the quarter and the same quarter of 2019 (i.e. comparing Q2 of 2020 to Q2 2019, and comparing Q2 2021 to Q2 2019, etc). The amount of the gross receipts decline that you must have in order to qualify for the credit varies based on which year you are calculating the credit for.

-Whether you were fully or partially shut down during the period

Overview of the credit (ERTC) for 2020 :

The Federal government passed the CARES (Coronavirus Aid, Relief and Economic Security) Act on March 27, 2020.

Any private sector or non-profit employer, regardless of its size, is eligible for the Employee Retention Credit during calendar year 2020.

To be eligible, the business must:

Be fully or partially suspended due to government order due to COVID-19, or

incur a 50% decline in gross receipts from the same quarter in 2019, between 3/13/20 through 12/31/20.

“Qualified wages” varies depending on the number of employees. The credit is available for qualified wages from 3/13/20 through 12/31/20.

Overview of the Credit (ERTC) for 2021:

In December 2020 the Consolidated Appropriations Act, and in March 2021 the American Rescue Plan Act were signed providing additional COVID-19 relief packages for businesses. Specifically, this new legislation amends, expands, and enhances the CARES Act Employee Retention Credit (ERC).