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Don’t Miss Out! You Could Qualify for the Employee Retention Credit

March 10, 2022

Have you taken advantage of the ERC yet? You may be overlooking this valuable tax break. There are two key considerations. Read on.

Did you read our recent blog, Are You Eligible for the RI Rebounds Hospitality, Tourism and Events Grant Program? Not eligible for the RI Rebounds Grant? The employee retention credit (ERC) might be an option for you. Don’t miss out on this valuable tax break—we’ve helped many businesses realize their eligibility--see if you qualify.

Who should explore the employee retention credit?

All business entities and tax-exempt organizations should consider the credit.

There are 2 ways to be eligible for the employee retention credit:

  1. Entities that were subject to a qualified full or partial shut-down order – (ex. Nearly all Restaurants from March 2020 through May 2021)
  2. Entities that had a Gross Receipts drop compared to 2019:
    1. Entities that had a Gross Receipts drop of greater than 50% in a calendar quarter during 2020 compared to the same quarter in 2019,
    2. Entities that had a Gross Receipts drop of greater than 20% in a calendar quarter compared to same calendar quarter in 2019
      1. This should be examined for the following calendar quarters – 4th quarter 2020 (alternative method), Quarters 1, 2 and 3 of 2021

What is the credit worth?

The credit is worth up to $5,000 (50% of the first $10,000 of qualified wages) per employee for 2020 and up to $7,000 (70% of the first $10,000 of qualified wages) per employee PER QUARTER in 2021. Bear in mind you cannot claim this credit on wages if the same wages were used to obtain PPP forgiveness.

Are there limitations?

Generally most entities that averaged under 500 full time employees during 2019 and satisfy one of the two eligibility requirements may qualify during 2021. This number was lower at 100 full time average employees during 2019 to qualify for the credit in 2020. Other factors must also be considered along with alternative methods available.

Questions on the ERC and if you qualify? We’d be happy to help. Reach out to us today.

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