What is the ERTC?
The Employee Retention Credit was introduced in the 2020 Coronavirus Aid, Relief, and Economic Security (CARES) Act. It is a refundable tax credit for wages paid by an eligible employer to retained employees from March 13, 2020 to December 31, 2020. This credit amounts to 50% of qualified wages given to employees (wages up to $10,000).
Updates were made to keep the ERTC also effective in early 2021. For employees retained from January 1, 2021 to June 30, 2021, the credit amounts to 70%.
The ERTC acts as an incentive for employers to retain employees during the Coronavirus pandemic.
Employer Eligibility
Employers that run a business, trade, or tax-exempt organization are eligible for the ERTC act if they meet the following criteria:
- Had their operations fully or partially suspended as a result of COVID-19 governmental orders.
- Saw a “significant decline in gross receipts”
- For March 13, 2020 to December 31, 2020: gross receipts less than 50% of the gross receipts for the same quarter in 2019
- January 1, 2021 to June 30, 2021: gross receipts less than 80% of the gross receipts for the same quarter in 2019
If an employer’s business did not exist in 2019, they can use the same quarter in 2020 to determine the gross receipt decline.
Let us Help You Claim the ERTC
To fully evaluate whether you are eligible for the ERTC, check in with a trusted financial advisor like the representatives at Matthews & Nulty.
We’re proud to be experts in providing financial guidance for employers. Let us help you determine whether you are eligible and assist you in claiming your Employee Retention Tax Credit. Connect with us today by calling 732-257-8604, or send us a message on our website.
