Employee Retention Credit: Is your business eligible?

Employee Retention Credit - Is Your Business Eligible for the Employee Retention Credit - Stratlign Accounting

Employee Retention Credit – Is Your Business Eligible

Because the coronavirus has negatively affected so many businesses nationwide, a number of coronavirus payroll tax credits are available to help employers out. One option is the Employee Retention Credit (ERC).

The Employee Retention Credit is a CARES Act relief measure for businesses. It is a fully refundable tax credit that eligible employers who are able to keep employees on payroll can claim.

How much is the credit?

For 2020: The maximum ERC credit is $5,000 per employee.

For 2021: The maximum ERC credit is $7,000 per employee, per quarter for the first two quarters of the year. The total maximum ERC credit is $14,000.

Who is eligible for the ERC?

Businesses are eligible if either of these two things happened in 2020:

1. Your operations were fully or partially suspended due to a COVID-19-related governmental order, or

2. You experienced a significant reduction in gross receipts for one or more quarters.

Businesses are eligible for the first quarter of 2021 if either of these two things happened:

1. First-quarter 2021 gross receipts fall by more than 20% compared to first-quarter 2019 gross receipts, or

2. Fourth-quarter 2020 gross receipts fell by more than 20% compared to fourth-quarter 2019 gross receipts.

For 2020, employers with 100 or fewer full-time equivalent (FTE) employees during 2019 can claim the ERC on all wages paid to employees during the period in which the employer satisfied the shutdown test or the gross receipts test.

For 2021, the Act increases the small employer threshold from 100 to 500 FTE employees, meaning employers with up to 500 FTE employees in 2019 may claim the ERC for 2021 on wages paid for working or non-working periods.

How does the ERC now interact with PPP Loans?

Employers can now take advantage of the Paycheck Protection Program (PPP) and claim ERC. This part of the new law is retroactive, allowing PPP recipients to retroactively claim ERC. However, an employer that receives a PPP loan may not use those wages to qualify for the Employee Retention Credit, regardless of whether and when the loan is forgiven.

It is also very important to strategically plan out  your PPP forgiveness and 2nd Draw PPP loan around this ERC to maximize both!

Due to these and other technicalities, we encourage you to attend our webinar if you have questions on your eligibility or how to use both the PPP and ERC together.

How do you claim the Employee Retention Credit?

There is no Employee Retention Credit application. Instead, employers can claim the Employee Retention Credit on their Federal Form 941, 944, or 943 returns. If you think you may qualify or need help determining whether you qualify, please register for our ERC vs PPP Webinar Thursday 2/25/21 at 11am EST (available live and on demand)

Under this second round of coronavirus aid, business owners are able to get aid from BOTH the ERC and PPP Loan! (Potentially worth tens of thousands in funding) To maximize on both provisions strategic planning is important! Use the button above to register for our webinar, ERC vs PPP: Why use both! Thursday, 2/25/21 at 11am (Available Live & On Demand)


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Justice Bragg

Business Development Specialist, Florida

At work, Justice is passionate about helping the team make decisions and connections that propel the business forward. He prioritizes client satisfaction by serving as a medium to facilitate communication to the proper channels making sure every issue is properly addressed.

Outside of work, Justice enjoys exercising by going to the gym and playing pickleball with his friends. He is a self-proclaimed foodie who can’t say no to trying a new restaurant, sometimes even immediately regretting it.

Zachary Williams

Staff Accountant, Florida

At Level Accounting, Zach is responsible for bookkeeping & payroll. He is dedicated to ensuring financial success for our clients.

Beyond the office walls, Zach’s weekends are filled with adventure, whether he’s exploring Florida’s hidden gems with his wife or battling it out in tournaments. When it’s time to unwind, you’ll find him at the movies or casting his line out for a relaxing fishing session.

Melanie Jerome, MBA


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Seren Lunsford, MBA


Meet Seren, one of our dedicated staff accountants here at level accounting! She is responsible for bookkeeping & payroll. Outside of the office, you can find her on the sidelines of a soccer pitch, karting track, or baseball diamond, cheering on her two active boys. Seren is also a proud owner of two gentle giants, her beloved Great Danes. In her downtime, she channels her creativity into baking and decorating sugar cookies, always eager to experiment with new baked goods ideas and recipes. With her expertise in accounting and her passion for family, pets, and baking, Seren brings a unique blend of professionalism and warmth to our team.

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Ivette Rivera is our Executive Assistant at Level Accounting, juggling schedules and keeping things running smooth.

When she’s not crushing it at work, Ivette is an avid participant in her church community. As a mom, she’s all about those quality moments, whether it’s baking up a storm, hitting the water for some kayaking fun, or just chilling with a good book or binge-worthy show. And let’s not forget her partners in crime at home: Harley Quinn, the fridge-raiding pit bull, and Atlas, the cat who rules the roost. Ivette’s all about that balance between work hustle and personal bliss.