display-icons-in-post-footer .entry-date { display: none; }
Coveted Financial
We explore. We educate. We empower.

COVID-19 Hub

COVID-19 Hub

Please check back frequently as this page will be continually updated.

On our radar: Employee Retention Tax Credit

The COVID-19 Relief Package was released recently to take the place of the existing CARES Act, which rolled out mid-pandemic in 2020. One of the biggest changes to this financial stimulus plan is the additional funding put towards the Employee Retention Tax Credit (ERTC.)

While the credit was included in the CARES Act, the changes this year should help businesses even more. Here is what we know about the Employee Retention Credit, keeping in mind that all financial packages are fluid.

  • The overall intention of the credit is to keep U.S. workers on payroll, while also keeping small businesses and nonprofits afloat.

  • Businesses may qualify for both the Paycheck Protection Program (Round 2) and the Employee Retention Credit. Previously businesses could only qualify for one, so many chose the Paycheck Protection Program (Round 1.)

  • If a business qualifies for both PPP Round 2 and ERTC, funds can not be used to cover the same payroll costs.

  • The tax credit is $10,000 per employee per quarter (previously it was per year.)

  • The threshold for qualification is a 20% decrease in gross receipts, same quarter 2020 to same quarter 2019. Additionally, if your business only reaches that 20% or higher in one quarter, the tax credit can only be claimed that single quarter.

  • The employer can receive up to 70% of qualified wages as a payroll tax credit (previously 50%.)

  • This new provision is retroactive to the effective date included in section 2301 of the CARES Act.

For detailed information, we suggest this article by the U.S. Chamber of Commerce. The Coveted team is available to assist businesses determining their eligibility and claiming the credit. We encourage you to act quickly.

Susie Farmer