If your business was either fully or partially shut down due to a governmental order or your business has experienced a significant decrease in revenue, you may be eligible to apply for the newly enhanced employer retention tax credit.
The recently enacted Consolidated Appropriations Act of 2021 (CCA) put into law a few highly publicized programs including a second round of Stimulus payments and Paycheck Protection Program loans. A lesser known provision in the Act also enhanced and expanded the Employer Retention Credit (ERC) which will provide a substantial benefit to many businesses.
Changes Under the New Stimulus Plan
Under CCA, the Employer Retention Credit now does the following for 2021:
· Increased the limit of creditable wages from $10,000 per year to $10,000 per quarter for the 1st & 2nd quarters of 2021
· Increased the credit rate from 50% of qualified wages to 70%
· Reduced the required decrease in gross receipts from 50% to 20%
· Expanded the program to businesses with 500 or fewer employees
· Allows employers who also applied for Paycheck Protection Programs to now apply for the ERC for both 2020 & 2021.
If you believe your business may be eligible for this enhanced employer retention credit, please reach out to our office for further information