The IRS Wants YOU… To Claim the ERC

March 23, 2021

The ERC provides an opportunity you don’t want to pass up, but it can be easy to sell yourself short. The qualifications and calculations are complex, and the new interplay with the PPP only adds to that complexity, but Aprio can help. Our dedicated ERC and PPP teams are always up-to-date on the latest guidance and are experienced in helping businesses achieve the best possible benefit.

In a recent news release, the IRS implored businesses to take advantage of the newly enhanced and highly advantageous Employee Retention Credit (ERC), designed to provide direct aid and incentive to businesses that keep their employees on payroll during the pandemic. If your business has been impacted by the government shutdowns or taken a financial hit during 2020 or 2021, you may be eligible for a credit of up to $33,000 per employee.

Curious whether your business is eligible? Take Aprio’s survey to find out.

The ERC was first established by the CARES Act, but recent legislation expanded the credit, making it more lucrative than ever. The new and improved ERC details are:

  • Extended the life of the credit through December 31, 2021;
  • Reduced the threshold for a “significant decline” in gross receipts for 2021;
  • Raised the full-time employee cap for businesses to claim the ERC for all employees;
  • Increased the maximum credit a business can claim per employee per quarter for 2021; and
  • Expanded eligibility retroactively to include PPP loan recipients

The new allowance for PPP loan recipients to benefit from the ERC is a significant enhancement that creates a unique opportunity for businesses to maximize their total benefit with the right strategy. Aprio has seen the value in this credit first-hand through advising our clients, and the recent urging from the IRS only underscores its ability to provide critical aid when you need it most.

Disclaimer for services provided relative to SBA programs and the CARES Act

Aprio’s goal is to provide the most up to date information, along with our insights and current understanding of these programs and regulations to help you navigate your business response to COVID-19.

The rules regarding SBA programs are constantly being refined and clarified by the SBA and other agencies In certain instances, the guidance being provided by the agencies and/or the financial institutions is in direct conflict with other competing guidance, regulations and/or existing laws.

Due to the evolving nature of the situation and the lack of final published rules, Aprio cannot guarantee that additional changes or updates won’t be needed or forthcoming and the original advice given by Aprio may be affected by the evolving nature of the situation.

You need to evaluate and draw your own conclusions and determine your Company’s best approach relative to participation within these programs based on your Company’s specific circumstances, cash flow forecast and business strategy.

In situations where resources are provided by third parties, those services should be covered under a separate agreement directly with that service provider. Aprio is not responsible for the actions of any other third party.

Aprio encourages you to contact your legal counsel to address the legal implications of the impact of the CARES Act and specifically your participation in any of the SBA programs.

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About the Author

Justin Elanjian

Justin Elanjian, CPA, is the Partner-in-Charge of Aprio’s Paycheck Protection Program (PPP) & Employee Retention Credit (ERC) Services. As a national PPP expert, prominent speaker and strategic business advisor, Justin helps both lenders and borrowers navigate the complexities of the PPP. He also helps his clients realize benefits from other stimulus package programs, such as the ERC, and is committed to strengthening his clients’ balance sheets and helping them achieve what’s next. Justin also leads a team of more than 50 professionals who share his passion for helping businesses maximize the federal COVID relief programs.