With many American businesses around the country struggling due to the COVID-19 pandemic, the U.S. government responded by passing multiple stimulus packages and tax credits throughout 2020. One essential tax credit businesses should be aware of is the Employee Retention Tax Credit (ERTC).

The Consolidated Appropriations Act 2021, was signed into law on December 27, 2020. Among many changes and updates to the prior relief legislation for COVID-19, this law clarifies and expands the Employee Retention Tax Credit (ERTC) that was created by the CARES Act established in March of 2020. One of the bigger changes in the law is the Employee Retention Tax Credit (ERTC) is now available for employers who previously received, or will receive, a Paycheck Protection Program (PPP) loan. This change in the law provides significant benefits to employers, helping them during the economic disruptions stemming from the pandemic of COVID-19.

Eligibility Requirements 2020

Businesses with operations that were either fully or partially suspended by a COVID-19 governmental order during the period the order is in force; or gross receipts were less than 50% of gross receipts for the same quarter in 2019 until such quarter as gross receipts are 80% of same quarter in 2019. Businesses that were not in existence in 2019 could use a comparison to 2020 for purposes of the credit.

Eligibility Requirements 2021

Beginning January 1, 2021, the credit will be available to businesses with operations that are either fully or partially suspended by a COVID-19 governmental order during the period the order is in force; or gross receipts are less than 80% of gross receipts for the same quarter in 2019. Businesses that were not in existence in 2019 may use a comparison to 2020 for purposes of the credit.

How to Begin…

Refocused Business Consulting provides free initial consultations to evaluate your eligibility for Employee Retention tax credits.  We’ll provide an estimation on the credit you will receive, prepare the proper documentation you will need, and even work directly with your CPA to make sure all bases are covered.  Contact us today to learn more!