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Employee Retention Credit
BRC is a professional services and advisory firm that focuses on our clients. We understand the economic challenges and uncertainties created by COVID-19 and are positioned to provide you solutions. We are continually responding with resources and thought leadership to accomplish more than tax and assurance compliance engagements.
In this unprecedented time, business leaders are daily seeking guidance in navigating challenges they face. With our dedicated resources, BRC seeks to maximize your credit by focusing on the most significant refundable tax credit benefit available to you.
WHAT IS THE EMPLOYEE RETENTION CREDIT?
The origin of the Employee Retention Credit (ERC) is found in the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) and was modified and expanded by the Taxpayer Certainty and Disaster Tax Relief Act of 2020 (Relief Act).
For 2020, the ERC can be claimed by employers who paid qualified wages after March 12, 2020 and before January 1, 2021, and who experienced a full or partial suspension of their operations as the result of government orders or a significant decline in gross receipts from the same quarter in 2019 of greater than 50%. The credit is equal to 50% of qualified wages paid, including qualified health plan expenses, for up to $10,000 per employee in 2020. The maximum credit available for each employee is $5,000 for 2020. Under the CARES Act, employers that received Paycheck Protection Plan (PPP) loans were not eligible for the ERC but the Relief Act removed that limitation. (Please note that the same wage amounts cannot be covered by a PPP loan and an ERC.)
The Relief Act modifies the 2020 rules by increasing the maximum credit amount to $7,000 per employee for the first two quarters of 2021 and made more types of employers eligible to claim the credit.
The American Rescue Plan Act of 2021 (ARPA, enacted March 11, 2021) extended the ERC period through the end of 2021. The Department of the Treasury and the IRS will provide further guidance in the future for the third and fourth quarters of 2021.
*** LINKS ***
IRS NOTICE 2021-20
https://www.irs.gov/pub/irs-drop/n-21-20.pdf
This Notice is applicable to qualified wages paid after March 12, 2020 and before January 1, 2021. This Notice also contains similar information provided by the IRS in the Frequently Asked Questions link below.
IRS Notice 2021-23
https://www.irs.gov/pub/irs-drop/n-21-23.pdf
This Notice explains changes to the Employee Retention Credit for the first two quarters of 2021.
FAQs: Employee Retention Credit under the CARES Act
https://www.irs.gov/newsroom/covid-19-related-employee-retention-credits-general-information-faqs
This IRS cite covers many specific questions and areas concerning the ERC and has not been updated for the Relief Act or ARPA.
Contact BRC’s Employee Retention Credit Services to start a conversation!
Read more >> Download a ERC Services Information Sheet
additional resources at
BRC’s Covid Restructuring Team
Read more >> Download a Covid Restructuring Services Information Sheet
Email us for immediate response at : CovidAssist@brccpa.com
Kyle Corum Partner, CPA, CFE
Kyle Corum is a Partner with BRC and is the leader of the Firm’s Advisory Services practice, which includes a variety of different types of engagements including: Cybersecurity Due diligence for mergers and acquisitions Fraud and Forensic Investigations Agreed upon procedures Internal control reviews and analysis Outsource CFO and Controller duties Litigation support Shareholder […]
Jamie L. Parsons Partner, CPA
Jamie is a Partner in our Firm’s assurance area with over 19 years of experience in public accounting. She works primarily with non-profit organizations and clients involved in the affordable housing industry, including tax credit properties, U.S. Department of Housing and Urban Development and U.S. Department of Agriculture Rural Development sites. She has experience […]
