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Employee Retention Tax Credit (ERTC) For You
Based on the new law, the Employee Retention Tax Credit (ERTC) breaks down into 3 separate credits.
Let’s get into it:
ERTC Sec 206 - 2020
Everything is mostly the same as the previous employee retention credit except that it allows PPP borrowers to take both, if the same wages were not allocated to both the PPP & ERTC. Requires 100 or fewer employees (working or not working) or over 100 employees (not working) to be eligible.
ERTC Sec 207 - 2021
Includes changes to major reduction in the gross receipts tests, allowing more businesses to qualify (20% drop instead of 50%). Also opens it up to 500 or fewer employees vs 100.
ERTC Sec 302 - 2020 & 2021
Called ERTC for qualified disasters. They want to keep the ERTC for future disasters to help employers keep their staff.
This is one of the more complicated credits.
But for the right situation, this will be huge tax savings in 2021.
Do you think you qualify?
Did you know you can legally reduce your small business tax bill?
Besides doing tax preparation, we do tax planning, which is looking at a person’s life, business, and regulatory requirements to reduce taxes, legally.