Claim Your Employee Retention Tax Credit Today!

The Employee Retention Tax Credit (ERTC) is a credit that eligible businesses can claim on qualified wages. The IRS recently extended the deadline through Dec. 31, 2021 and expanded who is eligible to claim the credit. Learn more about taking advantage of the ERTC below. We would be happy to consult with you on what applies to your company, or please feel free to contact the relationship partner you already have at Fineman West: info@fwllp.com or 213-688-9898. 

Who Qualifies for the Employee Retention Tax Credit? 

Eligible employers can claim the ERTC if they are private-sector businesses and tax-exempt organizations that carried on a trade or business during calendar year 2020 or 2021. 

• Qualifying for the ERTC is no easy matter but is probably well worth it.  The ERTC credit can be up to $5,000 per employee for 2021 and up to $28,000 per employee for 2022. 
• You cannot use the same specific wages that you used for PPP loan forgiveness, EIDL grants, or employer credits when calculating the ERTC.  However, you can often still get the full or partial ERTC Credit after the wages already used for PPP forgiveness and employer credits are removed from the total wages paid.  We can determine which exact wages you need to use for the ERTC. 
• Depending on the company size, you may get the credit on all employees, or you may only get the credit on the employees who were paid to stay home.  We can help you determine this.  

• The easiest way to qualify for the ERTC Credit is to have experienced a significant decline in gross receipts from the same 2019 quarter during the 2020 or 2021 calendar years.  The quarterly decline from 2019 had to be 50% in 2020, but only had to be 20% in 2021.  
• If you did not meet the 50%/20% safe harbors in a 2020/2021 quarter, you might still qualify for the ERTC for operations that were fully or partially suspended due to government orders limiting your actions.  The IRS has issued complex rules and examples that must be followed to qualify without the safe harbors.  We can analyze and determine if you meet these subjective criteria issued by the IRS. 

What Recent ERTC Changes Mean for Employers 

As a result of the changes made by the Consolidated Appropriations Act, employers have multiple options to get paid the ERTC: 

• Eligible employers can now claim a tax credit against the employer share of Social Security tax on their quarterly payroll tax returns.  
• Or they can receive ERTC by amending past quarterly payroll tax returns already filed. 
• They can also file IRS forms to receive advance payment of the ERTC. 

Please Supply these Initial Checklist Items for Calculating Your 2020 ERTC 

1. Determine the total number of 2019 full-time equivalent (FTE) employees (who worked an average of 30 hours per week or 130 hours per month). If the company is a member of a controlled group or affiliated services group; the hours will need to be combined when calculating FTE.
2. Payroll reports by quarter by employee showing pay, pay type, withholding, and hours from March 13, 2020 to the latest quarter that ended in 2021 (in Excel) 
3. Please also include a detailed schedule of group health care benefits. 
4. Please breakout wages for severance, post-termination benefits and family leave, if any. 
5. If more than 100 FTE employees in 2019, identify employees who were paid in 2020 while not providing any services. 
6. If more than 500 FTE employees in 2019, identify employees who were paid in 2021 while not providing any services.
7. Sales by quarter for 2019, 2020, and 2021 net of returns, discounts, and allowances. 
8. PPP loan forgiveness applications and supporting schedules used to calculate the loan forgiveness.   
9. Information on any other employment credits taken during the quarters. 
10. Copies of 2020 and 2021 quarterly 941 payroll tax returns that were filed.  

‼️Important Reminders‼️ 

• Borrowers of either a PPP original loan or a second round PPP loan are eligible to claim the ERTC credit. 
• Employers who borrowed on a PPP loan can now retroactively claim the ERTC for 2020 and 2021 if you meet either of the tests in “Who Qualifies for ERTC” above. 

🚨Warning🚨 

• No double dipping. Careful consideration is necessary to ensure that wages are not duplicated for the ERTC, other employment credits, or forgiven as part of the PPP process – and that the tax benefits from all programs are maximized. 

Not all ERTC rules and requirements are mentioned above. We would be happy to consult with you on what applies to your company, or please feel free to contact the relationship partner you already have at Fineman West: info@fwllp.com or 213-688-9898.