One of the last remaining Covid tax relief measures is the Employee Retention Credit. Businesses who were hurt by Covid could get significant credits for employees by filing or amending their 941 forms: 1st quarter 2020 thru 2nd quarter 2021. To exploit these very lucrative credits, ERC mills have been advertising on TV and Radio to the public about the ease of getting these credits.
Let's clarify once and for all whether these credits are available to your business:
1. First, these credits are falling off quickly: the 1st qtr 2020 credit is gone, 2nd and 3rd qtr credits will both be gone by late summer 2023. The final credit will fall off in July 2024.
2. You will need to demonstrate a decline in gross revenues by 50% to get the 2020 credit compared to the previous quarter and 20% to get the 2021 credits. If so, you can get 50% up of the wages per quarter in 2020 and 70% of the wages in 2021 (some limitations may apply).
Do you think you meet the criteria? By doing a simple but thorough analysis, WATAX will be happy to see if you can take advantage of these credits while not ripping you off or steering you to an eventual audit.