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Hi, Esther.
Eligible companies can claim a refundable credit against what they typically pay in Social Security tax on up to 70% of the “qualified wages” paid out to employees.
As of January 2021, qualified wages for employers with fewer than 500 employees are those paid to all full-time employees during which there was a full or partial shutdown or a quarter that had a decline in gross receipts.
For employers with more than 500 employees, qualified wages only refer to those paid to employees who were not providing services during that same time period. These qualified wages are limited to $10,000 per employee per quarter in 2021; therefore, the maximum ERC available is 70% of $10,000, or $7,000 per employee per quarter.
For example, if you are a restaurant that had a 20% reduction in gross receipts in Q1 2021 versus Q1 2019, you can then request a tax credit of up to $7,000 per employee for the first quarter of the year.
If that trend continued through the rest of the year and you have lower gross receipts, you could potentially claim the ERC for Q1 through Q3 of 2021. For a restaurant with 30 employees, for example, the credit could be worth as much as $630,000 in 2021.
There are thousands of mandates that apply as well as hundreds of pages of criteria. You want to work with a firm who specializes in ERC refunds.
In tomorrow's email, the topic for you is: Guidelines for New Businesses.
You can schedule an appointment to discuss your eligibility, Esther, here: https://calendly.com.
To Your Success, The HD Group (602) 878-7696
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