Now that PPP applications are re-opening, we wanted to share this video talking about why it might make sense to wait to apply. Specifically, we wanted to share details of the Employee Retention Credit. After watching the video, if you want our help to figure out how your business should proceed, please reach out and let us know.
Highlights from Video
1. Employee Retention Credit – Are you eligible?
How it was for 2020
- Operations that were either fully or partially suspended by a COVID-10 government order OR
- Gross receipts were less than 50% for the same quarter in 2019
- Until gross receipts exceeded 80%
2. I’m eligible for the Employee Retention Credit. Now what?
- Credit is 50% of wages paid during the eligible period
- Maximum credit of $5K per employee per year
- Must exclude wages which were paid with PPP
- Might need to amend 2020 payroll tax filings
- Don’t file for PPP forgiveness yet
3. Why are you telling me to wait on PPP Round 2?
Changes for 2021
- 50% credit increases to 70%
- $10K wage cap per employee is per quarter instead of per year
- Revenue reduction of 20% creates qualifying quarter (2021 compared to 2019)
- Option to use preceding quarter to satisfy 20% drop
- When you receive PPP, the 24-week clock starts ticking
- Can you wait and maximize your ERC?
- Advance payment of ERC – up to 70% of average quarterly wages paid during 2019
Every business is unique, but I’ve shared a few different examples in the video to help explain it. Let us know if you have any questions after watching the video.
Check out our COVID-19 resource page for more blog posts, videos and helpful information for businesses related to the Coronavirus pandemic.