As the COVID-19 pandemic continues into its third summer, businesses are feeling the burn of financial distress and hardships. The good news is that help is available through the Coronavirus Aid, Relief and Economic Security (CARES) Act Employee Retention Credit (ERC), which provides a fully refundable payroll tax credit to eligible employers negatively impacted by the pandemic. Interested in learning more about whether you’re eligible for the Cares Act Employee Retention Credit? BBG is partnering with Synergi to help guide our clients through the eligibility analysis process.
The CARES Act ERC is complex. With over 200 years of collective experience in the tax credit industry, Synergi Partners maintains strong relationships with members of Congress in order to stay up to date on the evolving legislation and its intent. The team does the heavy lifting for employers, helping you to better understand the complexities of the legislation to get your business back on track.
Understanding Cares Act Employee Retention Credit Eligibility Requirements
To qualify for the CARES Act ERC, eligible employers must meet the Gross Receipts Test or the Government Orders Test, not both. In general, an employer is eligible under the Gross Receipts Test if they experienced a 50% decline in gross receipts in 2020 or a 20% decline in gross receipts in 2021 compared to 2019. An employer is eligible under the Government Orders Test if the experienced a full or partial suspension of business operations during the calendar quarter due to a government order limiting commerce, travel, or group meetings due to COVID-19. For example, a restaurant that suspended in-person dining and only offered takeout to comply with a government order, may be eligible because they suffered a partial suspension of business operations.
The CARES Act ERC is available to employers across various industries. Any size company is eligible for the ERC, but limitations on qualified wages may apply depending on the number of employees at a company. Non-profits, colleges, universities and businesses classified as essential may also be eligible. Those who utilized the Paycheck Protection Program (PPP) could also be eligible for the ERC, but they cannot file to include wages that were paid with forgiven PPP loans. Notably, there is a three-year statute of limitations to file for the CARES Act ERC for Q1-4 2020 and Q1-2 2021 and a five-year statute of limitations to file for Q3 2021, so eligible businesses must take advantage of the opportunity in a timely manner.
Start Your Eligibility Analysis Today
As you can see, a lot goes into determining eligibility for the ERC. We understand that tax credit processing is complex and dependent on each employer’s unique situation. Our team provides individualized assessments of tax credit eligibility for each business based on their facts and circumstances to ensure every employer is optimizing credits.
Not only does Synergi and BBG provide assistance with the CARES Act ERC, the team has extensive experience in helping determine eligibility for the Disaster ERC and Work Opportunity Tax Credit Program (WOTC). Contact the experienced employee retention consultants at Business Benefits Group (BBG) or today to begin exploring how you can optimize your tax credits.