Small business owners, did you know that the federal Employee Retention Credit (ERC) can provide up to $33,000 per employee in tax credits over 2020 and 2021? The National Federation of Independent Businesses (NFIB) created a guide to help businesses receive the tax credit ASAP.
To qualify for the ERC in a given 2020 quarter, a business must have experienced either:
- At least a 50 percent decline in gross receipts in a given quarter compared to the same quarter in 2019.
- A full or partial suspension of business operations due to a government order.
To qualify for the ERC in a given 2021 quarter, a business must have experienced either:
- At least a 20 percent decline in gross receipts in either:
- A given quarter compared to the same quarter in 2019;
- The immediately preceding quarter.
- A full or partial suspension of business operations due to a government order.
A business can also qualify as a Severely Financially Distressed Employer, meaning the employer:
- Suffered at least a 90 percent decline in gross receipts in a specific quarter compared to the same quarter in 2019.
A Severely Financially Distressed Employer can include all wages paid during the qualifying quarter for purposes of the ERC.
The maximum credit payout for 2021 is $7,000 per quarter, per employee, $28,000 total for the year. 70 percent of qualifying wages with a maximum qualifying wage amount of $10,000 per employee.
For full information on NFIB’s guide as well as information on additional resources or to join them, please click here.
For small businesses still facing hardship due to the Covid-19 pandemic, Economic Injury Disaster Loans (EIDL) are still available throughout the year with a December 31, 2021 deadline. the loan limit for the EIDL program was raised in April from 6-months of economic injury with a maximum loan amount of $150,000 to up to 24-months of economic injury with a maximum loan amount of $500,000.
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