The Employee Retention Credit is an excellent way for companies to reduce their tax liability. And any employer who paid qualified wages for 2020 and 2021 can still take advantage of these lucrative refundable payroll tax credits by filing an amended Form 941X. But as we reach the two-year mark, employers are still unclear about the program. So, we’re answering the most frequently asked questions here.

What is the Employee Retention Credit?

The ERTC was created to help employers offset the cost of keeping employees on their payroll during the COVID-19 pandemic.

Who is eligible for the credit?

To be eligible for the credit in 2021, an employer must have:
• been fully or partially closed due to a governmental order OR
• experienced a decrease of more than 20% in business when compared to the same quarter the prior year.

Are the PPP loan and the ERTC the same thing?

No. The Payment Protection Program was a loan provided to small businesses to help them keep their businesses during a period of economic hardship. The ERTC is a tax credit available to companies that continued to employ workers during that period. So, you can apply for the ERTC even if you received a PPP loan.

How much of a credit could I claim?

For 2020, the ERTC provides a 50% credit on wages paid to employees between March 12, 2020, and December 31, 2020, up to $10,000. That means you could claim a $5,000 credit for each person you employed in 2020.
For 2021, the ERTC provides a 70% credit on wages paid to employees between January 1, 2021, through September 30, 2021, up to $10,000. So, you can claim a $7,000 credit for each employee you employed in the first three quarters of 2021, with a maximum credit of $21,000 per employee.

Should I talk to my CPA about an ERTC claim?

It depends on your accountant and their expertise with the program. There are a lot of components to the ERTC program and eligibility rules are complex. Miami CFO specializes in maximizing Employee Retention Tax Credits for small business owners. Let’s set a time to review the process and collect the information we need to get started. Use this link to schedule a meeting: