4.6.2021

The Federal Employee Retention Tax Credit (ERTC) offers eligible employers significant tax benefits through an ability to claim a refundable tax credit for paying qualified wages and certain health plan expenses. Employers may be able to receive as much as $33,000 per employee in incentives.

The American Rescue Plan Act (ARPA) extends the ERTC through the end of 2021. There are different rules for the treatment of wages employers (1) paid from March 12, 2020 through December 31, 2020; (2) pay in the first half of 2021; and (3) pay in the second half of 2021 (the IRS guidance for the 2021 ERTC has not yet been issued). 

Eligibility for the tax benefits is also linked to an employer’s size, the impact of the pandemic on an employer’s ability to provide services, and the suspension of operations because of government mandates or reductions in quarterly gross receipts.

Employers can receive both Paycheck Protection Plan (PPP) loans and claim ERTC benefits, but there are limits on “double-dipping” (the eligible employer can claim the ERTC on any qualified wages that are not counted as payroll costs in obtaining PPP loan forgiveness).  ARPA also makes the ERTC available to “recovery start-up businesses” that began carrying on a trade or business after February 15, 2020, and that have annual gross receipts of $1 million or less.

ARPA Available Employer Tax Credit Incentives

Chart.png

If you are an employer with a question about the ARPA, contact Tracy Armstrong or another member of the Wilentz Employment Law team.

BLOG DISCLAIMER

The postings on this blog were created for general informational purposes only and do not constitute legal advice or a solicitation to provide legal services.  Although we attempt to ensure that the postings are complete, accurate, and current as of the time of publication, we assume no responsibility for their completeness, accuracy, or timeliness.  The information in this blog is not intended to create, and receipt of it does not constitute, a lawyer-client relationship.  Readers should not act upon this information without seeking professional legal counsel.

This blog may contain links to independent third party websites and services, including social media. We provide these links for your convenience, and you access them at your own risk.  We have no control over and do not monitor the content or policies (including privacy policies) of these third-party websites and have no responsibility for, and no liability with respect to, their content, accuracy, or reliability.  Unless expressly stated, we do not endorse any of the linked websites or any product, service, or publication referenced herein or therein.  We will remove a link to any site from this blog upon request of the linked entity.

We grant permission to readers to link to this blog so long as this blog is not misrepresented. This site is not sponsored or associated with any other site unless so identified.

If you wish for Wilentz, Goldman & Spitzer, P.A., to consider representing you, please obtain contact information from the Contact Us area of this blog or go to the firm’s website at www.wilentz.com.  One of our lawyers will be happy to discuss the possibility of representation with you. However, the authors of Wilentz blogs are licensed only in New Jersey and/or New York and do not wish to represent anyone who viewed this site in a state where the site fails to comply with all laws and ethical rules of that state.