THIS IS A BIG DEAL!

DON’T LEAVE MONEY ON THE TABLE

Enacted as part of the CARES Act in March of 2020, the Employee Retention Credit provides a tax credit to employers who qualify based on wages paid. In many cases the credit is substantial.

CLAIM CREDIT EVEN IF YOU RECEIVED A PPP LOAN

Available to all employers who were adversely impacted by the pandemic. Taxpayers can now claim the credit even if they received a PPP loan. Slightly different rules apply to 2020 and 2021 credits.

MAXIMIZE YOUR RETURN: REVIEW ERC BEFORE YOU APPLY FOR PPP 2.0 LOAN FORGIVENESS

Any wages paid for with PPP funds cannot also be used to claim the credit, nor can wages which are claimed for the FFCRA credit. By reviewing credit eligibility prior to applying for PPP 2.0 forgiveness, companies can maximize ERC potential and still receive full PPP forgiveness.

Wages used to support PPP forgiveness or used to sustain an FFCRA credit cannot be used to sustain an ERC. By reviewing ERC credit eligibility prior to applying for forgiveness, companies can time their submission for PPP forgiveness such that they maximize ERC potential and still receive full forgiveness.

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ACTION ITEMS

CHECK ELIGIBILITY

  • Must be engaged in a Trade or Business in 2020 or the first two quarters of 2021, and
  • Must have had operations totally or partially suspended due to a government order, or
  • Must have experienced a qualifying reduction in gross receipts

DETERMINE MAGNITUDE OF THE CREDIT

  • 2020: up to $5,000 per employee for the year
  • 2021: up to $28,000 per employee – $7000 per EE per qualifying quarter

NEED HELP? CONTACT VCFO

  • Our consultants can determine if you qualify and assess the impact of the credit

ERC ELIGIBILITY AND CALCULATION SUMMARY

ERC ELIGIBILITY AND CALCULATION SUMMARY

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Information presented is subject to further change as additional guidance may be released by the Internal Revenue Service or other governmental authorities. Information presented does not include all scenarios or situations that may apply. Information included does not represent legal advice. vcfo recommends further discussion with legal counsel regarding legal questions related to the information presented.

MAKING COMPANIES STRONGER

vcfo is a professional services firm making companies stronger by bringing the wisdom and experience of senior level Finance, HR, and Recruiting executives to each client engagement. Our team of consultants guides CEOs and business owners in making strategic decisions, optimizing operations, and providing people support. Since 1996, vcfo has supported more than 5000 clients nationwide with offices in Austin, Dallas, Denver, and Houston.