Employee Retention Credits

Overview

What are Employee Retention Credits?

Were your business operations fully or partially suspended? Did your business lose revenue? Did your business operations start after February 15, 2020?

If so, you may qualify for an Employee Retention Credit (ERC).

ERC is a refundable credit based on qualified wages and certain healthcare costs. It was established as part of the CARES Act to help businesses with the cost of keeping their staff employed.

  • For tax year 2020, the refundable tax credit is: 50% of qualified wages paid per employee
  • For tax year 2021, the refundable tax credit is: 70% of qualified wages paid per employee

Your company could be eligible for credits up to $26,000 per employee between these qualification periods.

 

Qualification Criteria

The ERC applies to private employers, nonprofits, and certain governmental entities. For eligible employers, ERC qualification is determined by one of two factors:

 

  • A trade or business has been fully or partially suspended due to a government order.
  • An employer that has a significant decline in quarterly gross receipts.

Applicable Industries

The following list includes common industries with qualified ERC:

  • Restaurants
  • Dealerships
  • Dental Clinics
  • Event Venues
  • Physicians Offices
  • Service Providers

Why Choose Us?

Kings Peak Tax will help evaluate the special circumstances surrounding your business operations to maximize your potential credit.

Your ERC will vary depending on the period, the number of employees you have, and other potential factors. We can assess whether your Company qualifies for the ERC and assist you in properly calculating and documenting these credits.

erc tax credit