ERTC Credit
The Employee Retention Tax Credit (ERTC) is a tax credit established by the United States government as part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act in response to the COVID-19 pandemic. The ERTC is designed to encourage eligible employers to keep employees on their payroll during the pandemic by providing a refundable tax credit against certain employment taxes. The legal definition of the ERTC Credit can be found in Section 2301 of the CARES Act, as well as subsequent legislation such as the Consolidated Appropriations Act, 2021 and the American Rescue Plan Act of 2021.
The ERTC Credit is a tax credit equal to 50% of qualified wages paid to employees by eligible employers during a specified period of time, up to a maximum credit of $5,000 per employee for the entire period. Eligible employers are generally those that experienced a significant decline in gross receipts or were subject to a full or partial suspension of operations due to government orders related to the pandemic. Qualified wages include wages paid to employees who were retained during the pandemic, as well as certain health benefits and retirement contributions.
It is important to note that the rules and requirements for the ERTC Credit can be complex and are subject to change. Employers should consult with a qualified tax professional to determine their eligibility for the credit and ensure they are complying with all applicable laws and regulations.
Understanding the Employee Retention Tax Credit (ERTC) and How Carr Law Firm Can Help You Claim It
The COVID-19 pandemic has significantly impacted the business world, forcing many employers to make tough decisions about their workforce. To encourage eligible employers to keep their employees on payroll, the US government introduced the Employee Retention Tax Credit (ERTC) as part of the CARES Act. In this article, we will explain what the ERTC Credit is, how it works, and how the Carr Law Firm can help you claim it.
What is the ERTC Credit?
The ERTC Credit is a refundable tax credit that was introduced as part of the CARES Act in March 2020. It is designed to encourage eligible employers to keep their employees on payroll during the COVID-19 pandemic. The credit is equal to 50% of qualified wages paid to employees by eligible employers during a specified period of time, up to a maximum credit of $5,000 per employee for the entire period.
Eligibility for the ERTC Credit
To be eligible for the ERTC Credit, an employer must meet one of the following criteria:
Experience a significant decline in gross receipts:An employer must demonstrate that its gross receipts have declined by more than 20% in any calendar quarter of 2020 or 2021 compared to the same quarter in 2019.
Partial or full suspension of operations: An employer must show that they were fully or partially suspended during a calendar quarter in 2020 or 2021 due to government orders related to COVID-19.
Qualified Wages for the ERTC Credit
Qualified wages are defined as wages paid to employees who were retained during the pandemic, as well as certain health benefits and retirement contributions. Qualified wages vary depending on the size of the employer and the period in which they were paid. Employers with fewer than 500 employees may claim the credit for all wages paid to employees during a qualified period. However, for larger employers, the credit only applies to wages paid to employees who were not providing services.
How Can Carr Law Firm Help?
Carr Law Firm is a full-service tax law firm with over 25 years of experience in tax law representation. Our founding attorney, Nathan E. Carr, has a Master Degree in Taxation and is well-equipped to help you navigate the complex rules and requirements of the ERTC Credit. We can help you determine your eligibility for the credit, identify qualified wages, and ensure that you are complying with all applicable laws and regulations.
Conclusion
The ERTC Credit is a valuable tax credit that can help eligible employers keep their employees on payroll during the COVID-19 pandemic. If you believe that your business may be eligible for the credit, don't hesitate to contact Carr Law Firm for expert tax law representation. Our experienced team can help you navigate the complexities of the ERTC Credit and ensure that you are in compliance with all applicable laws and regulations.