ERC Summary for Small Businesses
What is ERC (Employee Retention Credit) (i.e. What’s in it for me)?
â–ª 2020: A refundable payroll tax credit worth up to 50% of wages paid to employees from 3/12/20 to 12/31/20 (max. $5K per employee)
â–ª 2021: A refundable payroll tax credit worth up to 70% of quarterly wages paid to employees for each qualifying quarter (max. $7K per employee per quarter) through 12/31/21
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Who Qualifies?
Requirement 1:
Employees
â–ª 2020: 100 or less full-time employees during 2019
â–ª 2021: 500 or less full-time employees during 2019
Requirement 2:
Impact to Business
2020
â–ª Business operation is fully/partially suspended due to government orders due to COVID-19 OR
â–ª 50% decline in gross receipts compared to the same quarter in 2019, e.g. Q2 ‘20 vs. Q2 ’19
2021
â–ª Business operation is fully/partially suspended due to government orders due to COVID-19 OR
â–ª 20% decline in gross receipts compared to the same quarter in 2019, e.g. Q1 ‘21 vs. Q2 ’19 (can also use prior quarter to qualify, e.g. for Q1 ‘21, Q4 ‘20 vs. Q4 ‘19)
What else?
â–ª You can take advantage of PPP, ERC, and COVID pay (thru expanded FMLA) but you must use separate gross payroll wages for each program
â–ª You can retroactively apply for 2020 ERC and 2021 ERC. You can also proactively apply for 2021 ERC if the business cash needs are more immediate.
Contact us at eric@edgebusinessplanning.com or 804-833-1792
for specific assistance with your business
Disclaimer: The above information is a summary only based on current guidance and interpretation of the CARES act. There are additional details and requirements not stated above. Program parameters subject to change based on additional guidance and legislation.
TESTIMONIALS
"EDGe made the ERC process a breeze. Paula went above and beyond when it
came to walking us through each step. She worked with our payroll company
and needed minimal help to get everything submitted. EDGe made our lives
easier during a time we didn't need anything added to our to-do list. I
would highly recommend EDGe to anyone who asked."
Preschool Owner - Glen Allen Virginia
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"I appreciate your help so much! when my refund gets here, it will be magical :)
Thank you so so much."
Art and Party Supplies Owner - Richmond Virginia