Verdeja, De Armas, Trujillo & Alvarez, LLP (VDTA) is assisting organizations
with financial questions and tax concerns related to the Employee Retention
The ERC was established by the Coronavirus Aid, Relief, and Economic Security
(CARES) Act, P.L.116-136, in March 2020 in addition to the Paycheck Protection
Program (PPP). It provides a per employee refundable credit to eligible
businesses based on a percentage of qualified wages and health insurance
benefits paid to employees.
Based on IRS Notices 2020-21 and Notice 2021-23, there are certain required
tests for eligibility. 1) a partial or total government-ordered shutdown, or 2) a
decline in gross receipts. The decline in gross receipts test is based on a
“significant” decline in gross receipts in quarters of 2020 (more than 50%) and
2021 (more than 20%) compared with the same quarter in 2019. The maximum
credit available per employee is $26,000, up to $5,000 during 2020 and $21,000
The credit can often be a significant amount and can be claimed even if you
received PPP funds. We believe it is worth assessing.
If you believe your organization may qualify for the ERC, please do not hesitate
to call us and our team of experts will assist you with this matter.