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Employee Retention Credit Opportunities
In March 2021, the Employee Retention Credit (ERC) was extended through December 31, 2021, and expanded as part of the American Rescue Plan Act of 2021. The ERC is a tax credit first put in place last year as a temporary coronavirus-relief provision to help businesses keep employees on payroll and businesses have received tens of hundreds of thousands of dollars in tax credits for the ERC. Unfortunately, taxpayers continue to not maximize this benefit.
Commonly missed opportunities:
Commonly missed opportunities:
- BOTH ERC and PPP (Paycheck Protection Program) can be claimed (PPP will only account for 2.5 times your monthly payroll expenses and is meant to be spread out over six months leaving plenty of uncovered wage expenses for claiming ERC.)
- A reduction of 50% in gross receipts is no longer required; a 20% reduction now qualifies
- Even if your business was not shut down you may qualify. A partial shutdown could potentially qualify
- Being deemed as an essential business could still qualify if an impact or change in business occurs
- Charities (churches, nonprofit hospitals, museums, etc.) can also be candidates for the ERC
Rick Meyer, CPA, MBA, MST
CPA Voice September/October 2021
