If Your Business Did Not Receive a PPP Loan, Check Out the Employee Retention Tax Credit!

Did your business have to fully or partially suspend operations during any quarter in 2020 due to the coronavirus?
Did your business experience a significant decline in gross receipts as a result of the coronavirus during any quarter in 2020?

The Employee Retention Tax Credit (“ERTC”), a relief measure of the CARES Act, provides a refundable payroll tax credit for 50 percent of qualified wages paid by employers to employees during the COVID-19 pandemic. The credit is available to qualified employers whose (1) operations were fully or partially suspended, due to a COVID-19 related shut-down order, or (2) gross receipts declined by more than 50 percent when compared to the same quarter of the prior year.

The ERTC has a maximum credit amount of $5,000 per employee for all calendar quarters. The credit is calculated by taking 50% of an employee’s qualifying wages. Up to $10,000 in wages may be considered per employee for all calendar quarters.
For employers with greater than 100 full-time employees, the credit is based on wages paid to employees who did not work between March 13, 2020 through December 31, 2020 due to the coronavirus-related circumstances described above. For eligible employers with 100 or fewer full-time employees, the credit is based on wages you paid to all employees, whether the employer is open for business or subject to a shut-down order.

To determine your ERTC business eligibility, we have included a link to the Employee Retention Credit Eligibility Tool developed by Thomson Reuters. By answering a few short questions, the tool will help to determine if your business qualifies for this ERTC. Once you have your recommendations, you may print them and bring them to us for review and to advise you on how the credit may impact your 2020 tax returns.

NOTE: Employers may not claim both the Employee Retention Credit and the Paycheck Protection Program loan. This credit may only be received if the business does not receive and use the PPP loan.

Our tax professionals at TRP Sumner are available to assist and advise you on these rapidly evolving issues, challenges, and opportunities. In addition, we are closely monitoring the Paycheck Protection Program Loan Forgiveness process and can assist you with the complexities of this process as well. We welcome the opportunity to help you with these matters as well as other tax and financial issues. Please contact us at one of our three locations in Fayetteville and Dunn, NC. Helping your business to thrive during these challenging times is our priority.

Click below for the Employee Retention Credit Eligibility Tool!
https://covidhelp.thomsonreuters.com/erc/index.html