The Employee Retention Credit (ERC) has been updated to provide even more benefits to employers and employees through the Coronavirus Aid, Relief, and Economic Security (CARES) Act. The Relief Act of 2020 was amended and extended for the first and second quarters of 2021. The original guidance (and FAQs) is listed on the IRS website.
2021 Changes to Employee Retention Credit
The ERC was extended another 6 months (to June of 2021). We know what you’re thinking: “It’s too late - why are you telling me about this?” It’s not too late. The credit can be claimed retroactively, so as long as you’ve got the proper documentation to back up your claim, you can still cash in on this awesome benefit!
Here are some other important changes:
- Eligible employers can now claim 70% of the qualified wages. Qualified wages are limited to $10,000 per employee per calendar quarter, so the maximum amount is $7,000 per employee per quarter and $14,000 in 2021.
- The employee threshold was raised to 500 employees. Employers with fewer than 500 employees can count all wages, whereas employees with more than 500 can count wages for the time they were not providing services.
- Learn even more by completing the form below and getting FNB’s Can't Miss COVID Tax Credit You Need To Know About Now guide!
Are You Eligible?
Employers whose trade/business operations are fully or partially suspended during a calendar quarter due to governmental orders may be eligible, as well as any employer that has experienced a significant decline in gross receipts.
How to Claim the Employee Retention Credit OR Need More Information?
We’ve briefly reviewed some of the changes to the ERC credit for 2021 and highlighted why you should consider claiming this beneficial credit. The IRS is notorious for creating wordy, highly specific documents and guidelines, so there’s just no way we could cover everything here.
However, we created an easy-to-understand, three-page guide to provide further clarity on what the ERC credit means for you. Don’t miss out on utilizing this beneficial credit for your company. Simply fill out the form below to get your own copy of our Can't Miss COVID Tax Credit You Need To Know About Now guide today and learn everything you need to know.