With the Consolidated Appropriations Act, 2021, millions of small-business owners like you now qualify for the employee retention credit (ERC) thanks to three big changes:
You can now obtain the ERC and the Paycheck Protection Program loan, but not on the same wages.
This new rule applies retroactively to 2020.
The new law adds an enhanced ERC for 2021.
And thanks to the latest new law, the American Rescue Plan Act of 2021 (ARPA), the already enhanced 2021 ERC is extended for an additional six months, through December 31, 2021.
The ERC is a big deal. It can put tens of thousands of dollars directly in your pocket to help offset your cost of paying employees during the COVID-19 pandemic.
Planning note. If you operate your business as a corporation and receive a W-2 from your corporation for the work you do, your W-2 wages qualify for the ERC, as we explain in Can You Claim the ERC for the Owner of a C or S Corporation?
The one downside to this tax credit: you have to deal with some complexity to determine your eligibility and to calculate your tax credit.
But not to worry. In this article, we’ll walk you step-by-step through a small-business example so you can see how you determine eligibility, calculate the credit amount, and claim your cash. ... Log in to view full article.