Until recently, employers were only eligible for one of two options from the CARES Act. But a new change means there may be more relief for your company. We can help you get your hands on more free stimulus money in addition to your PPP loan.
By Larry Kagan, Founder & CEO, Baron Payroll
It can be hard to navigate what's best for your business these days, as things change so quickly. However, you don't want to miss out on relief options simply from not knowing about them. One critical thing you should be aware of is the Employee Retention Credit and how that may now be available to you, even if you were not previously eligible.
The CARES Act and Consolidated Appropriations Act provided relief to businesses who sorely needed it during the fallout from the coronavirus pandemic.
One of those options is an Employee Retention Credit (ERC). An ERC is a payroll tax credit for qualified wages and healthcare costs paid between March 13, 2020, and December 31, 2020.
The ERC is available in two cases: a reduction in gross receipts of 50%; or if operations were partially or fully suspended due to government-ordered shutdowns. The latter case is particularly prevalent, especially in places like New York. If your business was affected by stay-at-home orders, there's a good chance you qualify.
The refundable tax credit helps reward businesses that retained employees during COVID-19. For 2020, it boils down to this: you may be eligible for up to an additional $5,000 per employee.
Before December, employers were only eligible for either a Paycheck Protection Program (PPP) loan or an ERC. But that is no longer the case. In late December of 2020, the Taxpayer Certainty and Disaster Tax Relief Act of 2020 was enacted, allowing eligible employers to qualify for both stimulus options.
The act is both an expansion and extension, going through June 30, 2021, and is available retroactively for 2020.
There are some conditions to follow: PPP loans may not claim the ERC for wages included in payroll costs counted toward their PPP loan forgiveness. But we can help with that. The biggest thing for you to know is that you may still be eligible for the ERC even if you already got a PPP loan. And that extra money can make a huge difference for you and your business.
We'll do the work, and we have access to the data. So it's not worth the headache or the worry of guessing whether you got all this information correct when Baron is ready to break down the numbers for each employee.
We'll do it on a contingency basis with a small down payment, but in return, you get the comfort of knowing that we handle it all, and we'll handle it all with the numbers at our fingertips. Last year was hard. Let us make this process easy. We know what New Yorkers have been through, and we can help businesses that are hurting.
While tax credits can be available for 2021, we are focusing on 2020 right now.
We will consult with you to calculate these tax credits, amend and file the appropriate payroll tax returns with the IRS to claim your credit. You will receive refund checks from the IRS for each quarter in 2020 that you qualify. In addition, we'll provide records showing your tax credit calculations so you will have a complete audit trail, just in case you ever need it.
By looking at the payroll numbers and isolating the payroll periods used for PPP forgiveness, we can help you maximize the additional payroll tax credits you will receive. As a result, Baron can make sure you get both the most ERC money without jeopardizing your PPP loan forgiveness and without double-dipping. Because you can still be eligible for both, thanks to this change. The money is there, and Baron will help our clients receive as much free stimulus money as they are eligible for.