Employee Retention Tax Credit (ERTC)

BY Admin

When the ERTC was originally established under the CARES Act, it could not be used if an employer received a Paycheck Protection Program (PPP) loan. In many cases the PPP loan exceeded the benefits of the ERTC, so employers chose to receive the PPP over the ERTC.

Subsequently, amendments were made to the ERTC in December 2020 and March 2021, which included allowing PPP recipients to be considered eligible employers if they meet all other eligibility criteria. These changes were made retroactive for 2020 and extended the ERTC through the end of 2021.

  • Are you a qualified employer that is eligible for the Employee Retention Tax Credit (ERTC)?
    1. Was the operation of your business, during any calendar quarter in 2020 or 2021, fully or partially suspended due to orders from an appropriate governmental authority limiting commerce, travel, or group meetings due to COVID‐19,
      OR
    2. Did your business have a significant decline in quarterly gross receipts during a calendar quarter within the period compared to the same quarter in 2019 or the immediately preceding quarter?
      • For 2020, did your quarterly gross receipts decline by 50% or more compared to the same calendar quarter in 2019? {Eligible employers may receive a credit for 50% on qualified wages up to $10,000 per employee ($5,000 maximum credit/employee for March through December 2020)}
      • For 2021, did your quarterly gross receipts decline by 20% or more compared to the same calendar quarter in 2019? {Eligible employers may receive a credit for 70% on qualified wages up to $10,000 per employee per quarter ($7,000 maximum credit/employee per quarter)}
  • Eligibility is reviewed and determined quarterly.
  • Did you receive a PPP loan? As noted above, employers who received a PPP loan can still claim the ERTC; however, the same wages cannot be used both for the PPP loan forgiveness, or FFCRA credits in calculating the ERTC.

If you believe that you may be eligible for the ERTC, please contact your Bauman representative to assist us in gathering the information needed to determine eligibility and potentially apply for this credit.