I’ve written extensively about the Employee Retention Tax Credit (ERTC). The program has changed several times, so it can be confusing to determine where things stand today. This is an important year-end update.
The ERTC program was part of the CARES Act of March 2020. It was meant to help support small businesses economically affected by COVID, with a decrease in revenue of at least 50% compared to the same quarter in 2019. Proof required showing a reduction in gross receipts. But businesses that could not meet the gross receipt test and were forced to shut down may still qualify for the ERTC. The Partial Suspension of Operations Due to COVID-19 Governmental Orders test gives them this opportunity.
Here are a few examples of situations in different industries that meet the Partial Suspension of Operations test:
- Construction companies
- Project locations shut down due to governmental orders
- Limitations on-site visits due to cleaning, maintenance, etc.
- Governmental agencies fully or partially shut down for construction permits
- Real estate management companies
- Eviction moratorium
- No late penalties for rent
- Law firms
- Courts fully or partially shut down due to government orders
- Litigation services suspended
- Medical and dental practices
- Limitations on elective procedures
- Room capacity and spacing limitations due to social distancing mandates
- Non-profit agencies
- Fundraisers limited due to mass gathering ordinances and room capacity limitations
- Social distancing mandates affecting classroom instruction, boarding, extra-curricular activities, sports field trips, physical education, etc.
- Manufacturing facilities
- Disruptions in supply chains have slowed or disrupted the manufacturing process
The Employee Retention Tax Credit program was set to expire on December 31, 2021. The $1 Trillion Infrastructure Investment and Jobs Act that President Biden signed into law changes the end date to October 1, 2021. However, employers can continue to claim the credit on amended payroll tax returns as long as the statute of limitations remains open, which is three years from the filing date. The Employee Retention Credit Program was designed to help businesses impacted the hardest by the pandemic. So, the eligibility rules are strict and limited. That makes the application process complicated. But, Miami CFO can complete the process for you from beginning to end. Let’s set a time when I can explain the steps.
Use this link to schedule a meeting:https://calendly.com/miami-cfo.
Wishing everyone a joyous holiday season!