Explore Your ERTC Eligibility
Designed to encourage businesses to keep employees on payroll, the Employee Retention Tax Credit (ERTC) is the most significant payroll tax credit in recent memory – and we want to help you maximize it. The American Rescue Plan Act extended the ERTC through December 31, 2021, expanded the credit amount and widened eligibility, so it is important to take a fresh look at the ERTC through the lens of current program rules.
I MAY BE ELIGIBLE FOR ERTC - WHAT'S NEXT?
If you determine possible ERTC eligibility for one or both years via the quizzes above, you have a number of options to get started:
- Purchase our ERTC Support Package, which includes valuable resources and a step-by-step how-to video
- Contact your RKL advisor
- Contact the Human Capital Management team using the form below. We will contact you to discuss your experience during COVID-19, collect the necessary information and calculate credit benefit.
THE RKL DIFFERENCE
We kick off the ERTC process with a comprehensive conversation to help maximize your credit eligibility. Unlike other firms that take a percentage cut of your credit, we charge a flat hourly rate to advise and calculate your credits. This means more of your financial benefit stays where it belongs – in your business.
Ready to have a conversation?
FREQUENTLY ASKED QUESTIONS
Q: Can I use ERTC if I received a Paycheck Protection Program (PPP) Loan?
A: Under the CARES Act of March 2020, employers could not use both PPP and ERTC. The COVID relief bill signed into law in December 2020 removed that prohibition and allowed PPP borrowers to go back and collect ERTC for wages not covered under PPP forgiveness.
Q: How can we take advantage of the Employee Retention Tax Credit (ERTC) in 2021 if we received a second draw Paycheck Protection Program (PPP) loan?
A: We recommend that employers wait until the end of their PPP loan covered period to pursue the ERTC. Why? Because it will allow you to better understand total payroll and other costs, as well as ERTC eligibility by quarter. We suggest the following:
- Use the 24-week loan period to maximize total possible payroll costs to use toward PPP and ERTC.
- Only apply payroll costs towards 60% of your total PPP loan.
- If you have the choice to apply health insurance costs toward either your PPP loan or ERTC, choose ERTC. You'll get a greater return on investment since you can use the invoice amount toward ERTC rather than just the employer contribution.
Q: What are some of the biggest ERTC rule changes between 2020 and 2021?
A: Eligibility by number of employees, decline in gross receipts of and calculation of credits
- Number of employees: Under 2020 rules, organizations with less than 100 employees in 2019 may use all wages paid to employees during eligibility period; those with more than 100 employees in 2019 may only use wages paid to employees who were not providing a service. Under 2021, organizations with less than 500 employees in 2019 may use all wages paid to employees during eligibility period; those with more than 500 employees in 2019 may only use wages paid to employees who were not providing a service.
- Decline in gross receipts: For 2020, employer must have at least a 50% decline in gross receipts when comparing quarter 2020 to quarter 2019 (i.e. Q1 2020 vs Q1 2019) OR the prior quarter to same quarter in 2019 (i.e. Q4 2020 vs Q4 2019).
- Calculation of credit: For 2020, 50% of eligible wages and health insurance (i.e. maximum of $5,000 per employee). For 2021, 70% of eligible wages and health insurance (i.e. maximum of $7,000 per employee).
Q: What industries stand to benefit the most from the ERTC?
A: Since the ERTC benefits directly relate to the level of COVID-19 disruption, it is no surprise that industries most severely impacted by the pandemic are seeing the largest credit amounts. Examples include restaurant/food service, retail, non-emergency healthcare, entertainment/amusement, hospitality and travel.
We've helped employers in a wide range of industries capture the maximum credit available including:
- $960,000 for health and fitness corporation
- $622,000 over 2020 and 2021 for a country club
- $460,000+ for a nonprofit marine research and education enter
- $315,000 for an S Corp advertising company
- $276,000 for a women's healthcare practice
Q: How does the IRS define "trade or business," "instrumentality," "gross receipts" and "full or partial suspension" for the purposes of the ERTC?
A: Visit these links to see IRS definitions for these terms as it relates to ERTC eligibility: