On December 27, 2020, the Consolidated Appropriations Act, 2021, H.R. 133 was signed into law. This bill included many tax provisions, and extensions of some expiring provisions. One being the retroactive provision of the Employee Retention Credit. This bill provides that employers who receive PPP loans may still qualify for the credit, as long as those wages are not paid with forgiven PPP proceeds.
As of now, we are still waiting for guidance on how companies can receive the retroactive credit. In the meantime, below are a few items to consider to help determine if you are eligible for this credit.
1. If the company partially or fully shut down due to government mandate between 3/12/2020 to 12/31/2020 and you continued to pay wages and/or healthcare to employees.
2. In any quarter during 2020 the company had a 50% or more decline in gross receipts compared to the same period in 2019.
3. If wages paid during the periods associated with 1 or 2 above were not used from forgivable loans, grants or other credits.
If you believe you might be eligible for this retroactive Employee Retention Credit and need more assistance, please contact us.