NFIB Weekly News
NFIB’s Small Business Legal Center continues to answer questions on the ERTC (02/01/2023)
The Employee Retention Tax Credit (ERTC), also called the ERC, continues to be one of the NFIB Small Business Legal Center’s most frequently asked about topics. The ERTC expired in 2021, but there is still time for employers to retroactively claim this tax credit for qualifying wages paid to employees. What is the ERTC?
The ERTC is a direct dollar-for-dollar reduction against the federal employment taxes that employers pay and report on a quarterly basis in their Employer Federal Tax Return (Form 941). A business can claim the credit on qualifying wages paid to employees for any quarter between March 13, 2020 – Sept. 30, 2021.
How do I know if my business qualifies?
There are two general ways a business can qualify for the ERTC:
- The business experienced a decline in gross receipts (at least 50% decline for 2020 quarter; at least 20% decline for 2021 quarter) compared to the same quarter in 2019; or
- The business experienced a full or partial suspension of business operations due to a government order. This provision also extends to suppliers of a business. If a business can prove its operations were impacted because of the inability to obtain goods or materials from its suppliers, it may qualify for ERTC.