What Employers Should Know About the Employee Retention Credit

The Consolidated Appropriations Act, 2021, modified and expanded the Employee Retention Credit (ERC), with key changes applying retroactively to 2020, including:

  • Making PPP loan recipients eligible for the credit in 2020 and 2021 
  • Expanding the list of eligible businesses in 2021 to include colleges, universities, hospitals and medical care providers 
  • Increasing the credit rate from 50% to 70% of qualified wages (maximum credit $7,000 per employee per quarter for 2021) 
  • Increasing the number of full-time employees from 100 to 500 for eligibility in 2021
  • Expanding the timeframe to claim the credit to June 30, 2021; note that the American Rescue Plan Act, 2021 extended this timeframe to December 31, 2021

The change allowing companies to use the ERC in conjunction with a Paycheck Protection Program (PPP) loan will be significant for many businesses. As guidance continues to be released on this and other matters related to the ERC, this page provides a collection of Cohen & Company resources to help you better understand the credit and its potential as it stands today.

Watch our webinar replay on basic eligibility and benefits of the ERC

 

Learn how we can help you maximize the ERC and minimize the burden on your accounting staff

  • Review entity structure to determine if the controlled group rules apply — if they do, the analysis of employee count and decline in gross receipts may have to be conducted on a combined basis 
  • Determine if businesses are eligible under either the government mandate test or the significant decline in gross receipts test 
  • Document eligible periods for businesses fully or partially suspended due to a government mandate 
  • Document the beginning and ending of eligible quarters as a result of a significant decline in gross receipts 
  • Coordinate with payroll companies on calculating full-time employees, and calculating and claiming the ERC 
  • Review PPP forgiveness applications to determine the impact on qualifying wages 
  • Strategically maximize the benefits under the ERC and the PPP 
Reach out to a member of your service team or one of the contacts on this page to help you maximize this credit.