The second stimulus bill enacted into law on December 27, 2020, and the American Rescue Plan Act of 2021 (ARPA) enacted into law on March 11, 2021, included significant enhancements to the Employee Retention Credit (ERC).

Employer Tax Credit (ERC)

If you haven’t taken advantage of this program, do it quickly. It’s free money from the federal government beyond the Payroll Protection Program (PPP) program. We found out they will not continue beyond the 3rd quarter of 2021 but you can still apply for previous periods. Our recommendation is do it now before the IRS says they are out of money. It’s a bit complicated (what a shock from the IRS) but we can assist in the determination and filing of this program. Please read below and let us know if we can be of assistance. 

It’s a complex program but we will navigate the requirements and prepare the tax forms for you. 

The three items needed to start our analysis:

  1. Revenue by quarter from 2019 to present
  2. Payroll totals by employee by quarter from 2019 to present
  3. PPP loans, how much received, period of time the funds were used and forgiveness dates

Once we receive these documents within a week we will provide a free analysis to determine eligibility.

Additional Details

Eligibility Detail

  • Private-sector businesses and tax-exempt organizations are eligible if they operate a trade or business during calendar year 2020 or 2021 and experience either:
    • the full or partial suspension of the operation of their trade or business during any calendar quarter because of governmental orders limiting commerce, travel, or group meetings due to COVID-19, or a significant decline in gross receipts. A significant decline in 2020 in gross receipts is a drop greater than 50% from the same quarter in 2019. For 2021, the drop must be greater than 20% from the same quarter in 2019.
  • extended the ERC for employers to January 1, 2021 through September 30, 2021,
  • significantly increased the maximum credit per employee, and • allows businesses that obtain PPP loans to be eligible for the employee retention credit retroactively in 2021 and in 2020.
  • The ERC is an opportunity for business owners with W-2 employees to obtain significant help from the government.

If Eligible:

  • Maximum credit per employee is $5,000 in 2020
  • Maximum credit per employee is $21,000 in 2021
  • Qualified wages are gross wages plus employer-paid group healthcare paid for the periods of ERC eligibility

Additional Details

Tax Detail

  • The ERC is not an income tax credit; instead, it is a payroll tax credit and is ultimately reflected on Form 941. Typically the IRS issues a refund check directly to your business, but they may elect to issue a credit for future payrolls.
  • The ERC credit is indirectly subject to income tax: Wages on the claimed credit must be reduced by the amount of the credit, which results in the credit being taxable income by reducing payroll deductions.
  • Expert Tax Credit Computation by experienced ERC advisors. QBcure Bookkeeping will prepare and file all necessary documentation.
  • A portion of our fees will be directly donated to Make A Wish Foundation to help fulfill children’s wishes. 
  • Please contact us to further discuss this incredible opportunity to impact your business.