ERTC Eligibility and Use Cases For COVID-19 Pandemic


The ERTC is an incentive program that can help keep employees on the payroll and in business. Currently only 4% of small-scale business owners are aware of this program, but it can have huge benefits for both employees and businesses.

ERTC Eligibility

Businesses must have experienced a decrease in gross receipts or disruption to operations during the COVID-19 pandemic to be eligible. They should also be able to demonstrate that their employees were compensated at the pre-pandemic rate.

Employee Credits Federal Employment Programs

The IRS offers a few tax credits to businesses that have been affected the COVID-19 pandemic. This includes the Employee Retention Credit (ERC). The ERC encourages employers to retain their employees and helps them recover from lost profits due to the pandemic.

While the credit can help you save tax dollars, many companies are unable to claim. It is recommended for your business to employ a qualified financial expert to examine the application to make sure you’re eligible for the credit.

It doesn’t matter whether you are an expert in credit for employees, it’s essential to know your eligibility. Also, be sure you record all expenses related the ERTC. This includes keeping track of employee wages as well as any health insurance costs for all employees.

December 2020 saw Congress expand ERTC eligibility retroactively to 2020 through the Consolidated Appropriations Act and through the first two quarters 2021 under the American Rescue Plan. This expands the ERTC for Recovery Startup Businesses and broadens the use cases for it.

If your business is thinking of applying for the ERC, it is crucial to speak with a certified accountant and payroll preparer. They can help you determine the credit size and strategically apply it across several stimulus programs to maximize your benefit.

Employers can get an refunded credit of up to 50% of the wages that they pay their employees over a certain period. This credit is based upon their total wages and health-care costs. The maximum credit per quarter is $10,000.

You must submit Form 941, Schedule R, to claim the ERC. This form can be submitted by companies with less than 500 employees. The credit is retroactive to the first quarter of 2020 and can still be claimed until December 31st 2021.

Your accountant and payroll preparer can also help you file your quarterly tax return on time and avoid penalties for filing late. They can also provide advice on the correct number of deductions for wages to claim on your 2020 tax return.

The ERC is a tax-free credit that allows eligible businesses to claim a credit for the qualified wages and health care costs they pay to their employees during the ERTC qualifying period. The credit is limited to $10,000 of qualifying wages per quarter and is available until December 31, 2020, and has a the limit of $7,000 per employee for the first three quarters of 2021.