The Employee Retention Credit (ERC) is a federal tax credit program encouraging employers to keep their employees on their payroll during the COVID-19 pandemic. While the ERC is a federal program, it applies to employers in Pennsylvania and other states.
To be eligible for the ERC, an employer must meet certain criteria, including experiencing a significant decline in gross receipts or a full or partial suspension of operations due to government orders related to COVID-19. The credit amount varies based on the number of employees and other factors but can be up to $5,000 per employee for 2020 and up to $7,000 per employee per quarter for the first three quarters of 2021.
Pennsylvania Employee Retention Credit for Small Businesses
It’s estimated that more than one out of three businesses were partially or wholly shuttered at some point during 2020 and 2021. As a result, millions of small businesses and their employees were either temporarily or permanently unemployed, and many of these companies have never reopened.
For businesses impacted by the pandemic, the Employee Retention Credit was created in March 2020 as part of the federal government’s CARES Act, designed to aid affected companies and their employees. In early 2021, the ERC was extended through the end of the third quarter of 2021 as part of the American Rescue Package.
Initially, the CARES Act denied eligibility of the ERC for any company that had received a loan through the Paycheck Protection Program (PPP). The American Rescue Package amended that rule by making businesses that received a PPP loan also eligible for the ERC program.
As you can see, the ERC has undergone several changes, and there are many technical details, including how companies must determine qualified wages, which employees are eligible or ineligible, and much more. As a result, many financial advisors, including Certified Public Accountants, have advised their clients to seek the advice of companies specializing in the ERC, like Bottom Line Concepts, to assist them with claiming the ERC.
Bottom Line Concepts Helps Pennsylvania Businesses
Bottom Line Concepts has helped more than 25,000 businesses enroll in the ERC, including many in the Keystone State.
Travis Mellish of College H.U.N.K.S. Hauling Junk & Moving in Harrisburg had this to say about Bottom Line Concepts:
“The Government Programs that are part of the Cares Act can be very daunting and confusing to understand. Our franchisees were getting a lot of mixed messages, and we were looking for a firm that could help educate them and guide them through the process. Bottom Line was extremely patient and diligent, working individually with most of our franchisees to maximize their money during the pandemic. They were a great partner, and we look forward to a long-lasting relationship.”
Let our ERC experts help you understand the nuances of the tax code and the ERC, and help you find out if you qualify. Contact us today and begin claiming this valuable tax credit.