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To be eligible for the Employee Retention Credit, you must meet these 2 base requirements:
AND 1 of the following requirements:
Experienced a significant decline in gross receipts. Specifically, your business must have endured a quarter in 2021 (be it Q1, Q2, or Q3) where the total gross receipts were less than 80% compared to the gross receipts of the corresponding quarter in 2019. This 20% reduction in gross receipts serves as a benchmark to identify businesses that have faced substantial financial hardship due to the pandemic.
Experienced a full or partial suspension of operations. This condition is met if, during a calendar quarter, a governmental order limiting commerce, travel, or group meetings was imposed due to COVID-19, and this order impacted the normal functioning of your trade or business.
If you commenced your trade or business on or after February 15th, 2020, and your annual gross receipts do not exceed $1 million, you are considered to be a "Recovery Startup Business." This qualification allows you to claim the Employee Retention Credit, even if you did not meet the other requirements of decline in gross receipts or suspension of operations due to government orders.
Wages paid in Q3 and Q4 of 2021 are eligible for ERC funding up to $50,000 per quarter as a Recovery Startup Business.
There are numerous businesses that meet the eligibility requirements for the ERC. Several industries, such as those mentioned below, qualify for ERC eligibility:
If you’re still uncertain as to whether or not businesses in your industry are eligible, please get in touch with a member of our team - we're always happy to help.
Per recent IRS changes, claims received before 9/14/2023 have a processing time of 180 days. Claim applications received after 9/14/2023 will be held until the beginning of 2024 before they are reviewed and processed. Wait times could increase later on as the deadline to apply draws closer. We recommend submitting your ERC application as soon as possible to receive your refund in the timeliest manner.