• Have your business activities been fully or partially suspended by official government order at any time during the pandemic?
  • Were your business revenues down 50% in any quarter during 2020 versus the same quarter in 2019?
  • Have your business revenues declined by 20% in 2021 when compared to the same quarter in 2019?

If the answer to any of the above questions is “YES”, then you likely qualify for up to $5,000/per employee in refundable tax credits for 2020 ($14,000 in 2021) under the Employee Retention Credit program!

The benefits and qualifications of the Employee Retention Credits were recently extended (through July 2021) and revised by the Consolidated Appropriations Bill enacted into law in late December. In addition, the previous prohibition which disallowed a business to obtain these credits if the business had received PPP funding has been modified. Now, businesses are eligible for Employee Retention Credits for eligible payroll and employee health care expenses paid in excess of such expenses paid using PPP proceeds. This increases the opportunity for more employers to seek these credits.

Qualifications for Employee Retention Credits are complex, and benefits vary based on the number of employees, the extent of your revenue decline and other matters – far too complex for what we will attempt to provide in this post.

Employers realize the benefits of Employee Retention Credits by adjusting the amount of payroll taxes due with Form 941 filings (i.e. federal withholding and FICA obligations), filing amended payroll tax returns for prior periods and/or filing a new form (Form 7200) to accelerate payment of the credits. Most Kimble clients use other third-party payroll servicers and will need to work with those providers to adjust their payroll tax returns to obtain the credits.

However, Kimble is available to assist you in evaluating the various qualifications and determining the amount of credits you may be able to claim.

 

Please contact Bill or Reece if you would like help in determining whether your business qualifies for this program.