• April 16, 2024

How to Determine ERTC Eligibility

The Employee Retention Tax Credit (or ERTC) is accessible to businesses that have suffered a interruption in their business operations as well as a decrease in gross receipts, or a loss of employees due to the COVID-19 pandemic. This refundable credit can provide up to $26,000 per employee . It rewards companies that retain or keep their employees.

The ERTC credit is available against qualified wages and health insurance expenses. Employers must submit the figures on a quarterly Form 941. They are able to claim a credit for 50% or more of these wages.

Eligibility to Claim ERTC

Many small and medium-sized companies are eligible for the ERTC. This includes construction companies who took out a loan under PPP. In early 2020, Congress modified the CARES Act to allow those borrowers to be eligible for the ERTC, a welcome change.

However, these businesses must prove that orders of the government that affected their work sites affected their revenues and operations to be ERTC eligibility. To satisfy this requirement, a construction employer must record the specific orders of the jurisdiction that affected their business, which includes any reduction in operation hours.

During the time the governmental orders were in place and the construction company’s gross earnings fell.

This is a critical factor for contractors who are eligible to use the ERTC however, it is a greater burden to show the IRS that a decrease in revenue was the reason for the government’s orders.

These types of cases require that you contact an expert tax professional as soon as possible. These experts can help determine if your business is eligible for ERTC. They can also find all payroll data from the last few years and create and submit the Form 941s.

The ERTC is an essential source of income for your business and should be considered by any business owner, regardless of size. This is an opportunity that every business should seize. It can either save or even destroy a company especially in times of economic decline.

ERC Today makes it easy to claim the ERTC. They have helped hundreds of business owners with data collection (including a portal that allows you to upload your 941s, PPP loan documents, and raw payroll) Credit calculation, as well as help to amend returns.

If your company has been impacted by the COVID-19 pandemic and you’re contemplating whether you are eligible to claim the ERTC You should consult with a tax professional who is qualified immediately. They can assist you in determining whether you qualify and provide a complete solution that will provide your business with a significant financial boost while reducing compliance risk.

Can an eligible company with ERTC access claim the ERTC as well as a PPP loan simultaneously?

The Consolidated Appropriations Act passed in December 2020 redressed this issue by allowing companies that took out first- and second-draw PPP loans to also be eligible for the ERTC. This is a major win for all businesses who have been financially affected by the Covid-19 epidemic.


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