Updates to Employee Retention Credit Are Great News for Employers – Allowing Retroactive Credits for 2020

Updates to Employee Retention Credit Are Great News for Employers – Allowing Retroactive Credits for 2020 Shannon & Associates Kent WA

The employee retention credit (ERC) is a provision of the CARES Act and is a tax credit allowing qualified employers to receive a refund of payroll tax deposits made in 2020. 

This credit is helping many of our clients who were either shut down by Governor Inslee’s Stay Safe Stay Home order in March of 2020, or businesses that suffered a significant reduction of their gross revenues in 2020 due to the pandemic or other business issues.

The IRS finalized guidance on these credits and laid out many examples of how this credit works and the interplay between the credit and PPP loan forgiveness in IRS Notice 2021-20, which was just issued March 1, 2021.

Here are some examples of how this is impacting some of our clients:

  • Dental practices ­– Most dentists were shut down from March 19 through May 4th.   For these practices, we are seeing credits in the range of $5,000 to $50,000. 
  • Restaurant and catering – This industry was hit particularly hard. Some of these businesses were hit with significant revenue declines.  We are seeing credits in the range of $10,000-$140,000 for restaurant and catering businesses.
  • Construction – Not all construction companies were shut down as many were deemed an essential service sector, but many were affected by revenue slowdowns as major players in the market such as Boeing and large construction sites were shut down for much of April and May.  We are seeing credits of between $20,000 and $150,000 for many of these businesses.

For large employers with more than 100 full-time employees, these credits are much more limited, but for smaller employers, there could be credits to help your business recover from the pandemic.

Do you need help with the Employee Retention Credit? Let’s talk.

If you would like our assistance to see if your business qualifies for the credit get in touch with us today.

We have a quick fact finder that we can send you. To get it, fill out our easy form here: Employee Retention Credit – How it works and How to Get It

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