EMPLOYEE RETENTION TAX CREDIT (ERTC) SERVICE
The Employee Retention Credit (ERTC) was created as part of the CARES Act to encourage businesses to continue paying employees by providing a credit to the eligible employer for wages paid to eligible employees.
The refundable credit is available from March 13, 2020, through September 30, 2021, and can be utilized even if companies received PPP loans.
Businesses that started up after February 15, 2020, are eligible for up to $100,000 of credits on wages paid from June 1, 2021, through December 31, 2021.
The Following Qualifications make the Business Qualify for ERTC.
- Employers whose business was fully or partially suspended due to emergency orders from an appropriate government authority that limited commerce, travel, or group meetings.
- Employers who had at least a 50% reduction in 2020 gross receipts for the current calendar quarter as compared to the same calendar quarter in 2019.
- Employers who had at least a 20% reduction in 2021 gross receipts for the current calendar quarter as compared to the same calendar quarter in 2019.
- Businesses could qualify for ERTC under supply chain provisions.
- The business was unable to find an alternative supplier and 10 % reduction of total revenue OR labor hours.
taxExpertsofOC.com is providing the following services to assist with ERTC:
- Determine if the employer qualifies, and if so, for which quarters.
- Determine which employee wages qualify.
- Calculate credits, including analysis of PPP interplay.
- Reconcile actual credits with advance credits requested.
- Prepare reconciled data for Form 941-X.
- Prepare documentation supporting eligibility.
Recipients of PPP loans are now eligible to qualify retroactively for the credit in 2020 and 2021.
For 2021, there is a maximum credit of $7,000 per eligible employee, per quarter. The 2021 credit is computed at a rate of 70% of qualified wages paid, up to $10,000 per eligible employee, per quarter.
For Eligible Employers with less than 500 average full-time employees in 2019, the credit is available for all employees receiving wages in 2021.
For 2020, there is a maximum credit of $5,000 per eligible employee. The 2020 credit is computed at a rate of 50% of qualified wages paid, up to $10,000 per eligible employee for the year.
For Eligible Employers with less than 100 average full-time employees in 2019, the credit is available for all employees receiving wages in 2020.
The following documents are required to verify the eligibility for Employment Retention Tax Credit (ERTC)
- Determine if the employer qualifies, and if so, for which quarters.
- 941’s and DE9C for 2nd, 3rd, and 4th quarters for 2020
- 941’s and DE9C for 1st, 2nd, and 3rd quarter for 2021
- Date and amount and Forgiveness Letter of PPP loan received in 2020 & 2021.
- Date and amount of any State of California grant received.
- Any government order/documents, which show the full or partial suspension of business OR impact letter.