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Gamble & Associates, LLC

Employee Retention Tax Credit

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The Employee Retention Credit (ERC) is a fully refundable tax credit for employers equal to 50 percent of qualified wages that eligible employers pay their employees. Allocable qualified health plan expenses are also included. The credit is fully refundable and could provide significant relief for your small to medium-sized business.

What is the Employee Retention Credit?

Eligible employers. For the purposes of this tax credit, these are employers that carry on a trade or business during calendar year 2020 that experienced a significant decline in gross receipts during the calendar quarter. Tax-exempt organizations also qualify.

Significant decline in gross receipts. Beginning with the first calendar quarter in 2020, in which an employer's gross receipts are less than 50 percent of its gross receipts for the same calendar quarter in 2019. The significant decline in gross receipts ends with the first calendar quarter that follows the first calendar quarter in which the employer's 2020 quarterly gross receipts are greater than 80 percent of its gross receipts for the same calendar quarter in 2019 or with the first calendar quarter of 2021.

Qualified wages. The credit applies to qualified wages paid after March 12, 2020, and before January 1, 2021. The maximum amount of qualified wages taken into account for each employee for all calendar quarters is $10,000 so that the maximum credit for an Eligible Employer for qualified wages paid to any employee is $5,000.

An Eligible Employer may not receive the Employee Retention Credit if the Eligible Employer receives a PPP loan that is authorized under the CARES Act. An Eligible Employer that receives a PPP loan should not claim Employee Retention Credits.

What We Do for You:

  • Figure out whether you qualify for the ERC
  • Calculate the amount of the tax credit you are entitled to
  • Amend prior Forms 941, as needed
  • Report third-party vendors (i.e., not CPAs) promoting improper claims for the ERC

Pandemic-related tax credits could help your business get back on its feet.

If your business struggled financially during the pandemic, tax relief is available. Please call the office today to find out whether you can take advantage of the Employee Retention Credit and other pandemic-related tax relief. You'll be glad you did.