January 14, 2021 – Advocacy News
IN CASE YOU MISSED IT:
The COVID-19 stimulus package signed into law by President Trump on Dec. 27 contains substantial enhancements to the employee retention tax credit enacted under the CARES Act. These changes will provide significantly more relief than the original credit.
Highlights of the expanded credit are:
- Increase the credit rate from 50 percent to 70 percent of qualified wages.
- Expand eligibility for the credit by reducing the required year-over-year gross receipts decline from 50 percent to 20 percent and provides a safe harbor allowing employers to use prior quarter gross receipts to determine eligibility.
- Increase the limit on per-employee creditable wages from $10,000 for the year to $10,000 for each quarter.
- Allows businesses with 500 or fewer employees to advance the credit at any point during the quarter based on wages paid in the same quarter in a previous year.
- Provide rules to allow new employers who were not in existence for all or part of 2019 to be able to claim the credit.
- Retroactive to the passage of the CARES Act, the bill allows employers who receive Paycheck Protection Program (PPP) loans to qualify for the ERTC with respect to wages that are not paid for with forgiven PPP proceeds.
All employers should contact their CPA’s immediately to make sure they can take advantage of these credits RETROACTIVELY and prospectively.
For more information please contact Dan Papineau at dpapineau@michamber.com