Employee Retention Tax Credit

The Employee Retention Tax Credit (ERTC) was created as part of the CARES Act to encourage businesses to continue paying employees by providing a credit to the eligible employer for wages paid to eligible employees. Recent changes allow for the ERTC to be utilized even by companies that received PPP loans.

KBKG is providing the following services to assist with ERTC:

  • Determine if the employer qualifies, and if so, for which quarters
  • Determine which employee wages qualify
  • Calculate credits, including estimates for current and future quarters
  • Prepare form 7200 for employer to submit to IRS to receive advances
  • After the quarter has ended, calculate the actual credits earned
  • Reconcile actual credits with advance credits requested
  • Prepare reconciled data for form 941

Recipients of PPP loans are now eligible to qualify retroactively for the credit in 2020 and the first six months of 2021. (Congress is currently in the process of voting on extending the credit through the end of 2021. » READ MORE)

For 2020, the credit is computed at a rate of 50% of qualified wages paid up to a maximum of $10,000 of wages for the year resulting in a maximum credit of $5,000 per eligible employee.

Eligible Employers

An Eligible Employer (including all members of a control group) must either:

1. Have their operations fully or partially suspended due to orders from a governmental authority

OR

2. Suffer a significant decline in quarterly gross revenue as measured against 2019

• 50% decline for 2020

• 20% decline for 2021

A governmental employer is not eligible.

For January 1st through June 30, 2021, the credit is computed at a rate of 70% of qualified wages paid up to $10,000 per quarter, resulting in a maximum credit of $7,000 per quarter per eligible employee.

Additional rules and limitations apply.

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