- March 19, 2021
- Posted by: Andy Scheu
- Categories: COVID19 Resources, Human Resources
The Employee Retention Credit (ERC) program has been expanded through the Economic Aid Act, making the credit more available to employers who meet certain criteria, including those who received a PPP loan. The ERC allows for employers to claim 50% of the first $10,000 paid to each employee for each quarter of 2020, and 70% of the first $10,000 paid to each employee each quarter for 2021. In addition, businesses are able to receive these credits as an advance by filing Form 7200.
Who is Eligible?
For 2020, businesses that saw gross receipts reduced by over 50% during any quarter (after March 12, 2020) compared to the same quarter in 2019, or those whose operations were either fully or partially suspended by government order, are eligible to receive employee retention credits.
For 2021, businesses that saw gross receipts for Q4 of 2020, or Q1 or 2021 reduced by over 20% compared to 2019 are eligible to receive the credits.
Businesses may claim the credit for each quarter of 2020 (after March 12, 2020) through Q2 of 2021, so long as gross receipts remain at less than 20% compared to the same quarter in 2019.
How Are Employee Retention Credits Claimed?
Most employers will account for any employee retention credit that they are eligible for through Form 941. Businesses that would like to retroactively claim employee retention credits for 2020 will need to file amended applicable employment tax returns. Form 7200 will need to be filed in order to receive credits as an advance.
Time & Pay is now assisting all of our clients claim any employee retention credit for 2020 and 2021 that is available to them. We will handle filing all amended returns, as well as Form 7200 in order to help our clients receive this financial assistance. To start the process, contact us today!