BizBoost News
Volume 11, Issue 4
For distribution 8/09/21; publication 8/12/21
The American Rescue Plan Act Creates ERTC Windfall for Startup Businesses
The American Rescue Plan Act extended the Employee Retention Tax Credit (ERTC) for the third and fourth quarters of 2021. It has also expanded the pool of eligible employers who can take the credit to include businesses started during the pandemic.
A Recovery Startup Business (RSB) is a business that was started after February 15, 2020 and has average annual receipts of no more than $1,000,000. While under the CARES Act, an employer had to experience a full or partial suspension of operations due to COVID-19-related governmental orders or a significant decline in gross receipts to take advantage of the ERTC, an RSB does not need to meet those requirements.
The time period to claim this credit for an RSB is from July 1, 2021 through December 31, 2021. It can be claimed on an originally filed Form 941 or an amended 941. As with other businesses, the credit continues to be capped at 70% of qualified wages limited to $10,000 per employee per quarter ($7,000 per quarter per employee), but an RSB is also limited to a maximum $50,000 in ERTC per quarter, regardless of the number of employees.
For new businesses, this is an incredible tax benefit and a great safety net to the normal struggles of any startup. The goal is to get employment back to pre-pandemic levels. The total benefit could be as high as a $100,000 cash infusion for 2021, so it’s definitely worthwhile for eligible employers to take advantage of this while available!
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The American Rescue Plan Act extended the Employee Retention Tax Credit (ERTC) for the third and fourth quarters of 2021. Learn more about this extension in our latest blog: __ Subscribe here: [link]
The American Rescue Plan Act extension of the Employee Retention Tax Credit (ERTC) expanded the pool of eligible employers who can take the credit to include businesses started during the pandemic. Learn more here: [link]
Business Tip: The time period to claim the Employee Retention Tax Credit for a Recovery Startup Business is from July 1, 2021 through December 31, 2021. It can be claimed on an originally filed Form 941 or an amended 941. Learn more about this extension here: [link]
The American Rescue Plan Act has created an alternate path for the Employee Retention Credit with its extension and expansion of the credit. Learn more in our latest blog article: [link]
A Recovery Startup Business is limited to a maximum $50,000 in ERTC per quarter, regardless of the number of employees, but it’s still a great cash flow boost to smaller startup businesses. Learn more here: [link]
A Recovery Startup Business (RSB) is a business that was started after February 15, 2020 and has average annual receipts of no more than $1,000,000. While under the CARES Act an employer had to experience a full or partial suspension of operations due to COVID-19-related governmental orders or a significant decline in gross receipts to take advantage of the ERTC, an RSB does not need to meet those requirements. Find out more here: [link]
Did you open a business after February 15, 2020 and have average annual receipts of no more than $1,000,000? If so, your business would classify as a Recovery Startup Business and does not need to meet the same requirements for the Employee Tax Credit. Find out more here: [link]
If you qualify as a Recovery Startup Business, the benefits of the Employee Retention Creditcould translate into $100,000 for 2021. It is definitely worthwhile for eligible employers to take advantage of this while available! Sign up for our newsletter to learn more about the expansion of the ERTC: [link]
