Upwise Sig

CARES ACT

Employee Retention
Tax Credit - ERTC / ERC

We are currently accepting applications to assist your business to receive the Employee Retention Tax Credits.  Whether you are a first-time applicant or received a PPP loan for your small business, we are working hard to facilitate this relief.

employee retention credit - erc - ertc

Step 1 of 2 - Create Your Loan Profile

Please note the information on this page as well as the required information in the application are subject to change pursuant to guidance published by the IRS. Eligibility and availability for ERC are determined on a case-by-case basis and subject to guidance published by the IRS.

Additional information about the Employee Retention Credits is available from the IRS and the US Treasury.

 
employee retention credit faq

Employee Retention Credit FAQ

1. What is the Employee Retention Credit?

The Employee Retention Credit is a fully refundable tax credit for employers equal to 50 percent of qualified wages (including allocable qualified health plan expenses) that Eligible Employers pay their employees. This Employee Retention Credit applies to qualified wages paid after March 12, 2020, and before January 1, 2021. The maximum amount of qualified wages taken into account with respect to each employee for all calendar quarters is $10,000, so that the maximum credit for an Eligible Employer for qualified wages paid to any employee is $5,000.

2. Who is an Eligible Employer? (updated November 16, 2020)

Eligible Employers for the purposes of the Employee Retention Credit are employers that carry on a trade or business during calendar year 2020, including tax-exempt organizations, that either:

  • Fully or partially suspend operation during any calendar quarter in 2020 due to orders from an appropriate governmental authority limiting commerce, travel, or group meetings (for commercial, social, religious, or other purposes) due to COVID-19; or
  • Experience a significant decline in gross receipts during the calendar quarter.

Note: Governmental employers are not Eligible Employers for purposes of the Employee Retention Credit.  However, tribal governments and tribal entities may be Eligible Employers. See Are tribal governments and tribal entities eligible for the Employee Retention Credit? Also, self-employed individuals are not eligible for this credit for their own self-employment earnings, though they may be able to claim the credit for wages paid to their employees.

For more information, see Determining Which Employers are Eligible to Claim the Employee Retention Credit.

3. When is the operation of a trade or business partially suspended for the purposes of the Employee Retention Credit?

The operation of a trade or business is partially suspended if an appropriate governmental authority imposes restrictions on the employer’s operations by limiting commerce, travel, or group meetings (for commercial, social, religious, or other purposes) due to COVID-19 such that the employer can still continue some, but not all of its typical operations.

For more information, see Determining When an Employer’s Trade or Business Operations are Considered to be Fully or Partially Suspended Due to a Governmental Order.

4. What is a “significant decline in gross receipts”?

A significant decline in gross receipts begins with the first calendar quarter in 2020 in which an employer’s gross receipts are less than 50 percent of its gross receipts for the same calendar quarter in 2019.  The significant decline in gross receipts ends with the first calendar quarter that follows the first calendar quarter in which the employer’s 2020 quarterly gross receipts are greater than 80 percent of its gross receipts for the same calendar quarter in 2019, or with the first calendar quarter of 2021.

For more information, see Determining When an Employer is Considered to have a Significant Decline in Gross Receipts.

5. How is the maximum amount of the Employee Retention Credit available to Eligible Employers determined?

The Employee Retention Credit equals 50 percent of the qualified wages (including qualified health plan expenses) that an Eligible Employer pays in a calendar quarter.  The maximum amount of qualified wages taken into account with respect to each employee for all calendar quarters is $10,000, so that the maximum credit for qualified wages paid to any employee is $5,000.

For more information and examples, see Determining the Maximum Amount of an Eligible Employer’s Employee Retention Credit.

6. What are “qualified wages”?

Qualified wages are wages (as defined in section 3121(a) of the Internal Revenue Code (the “Code”)) and compensation (as defined in section 3231(e) of the Code) paid by an Eligible Employer to some or all employees after March 12, 2020, and before January 1, 2021.  Qualified wages include the Eligible Employer’s qualified health plan expenses that are properly allocable to the wages.

The definition of qualified wages depends, in part, on the average number of full-time employees (as defined in section 4980H of the Code) employed by the Eligible Employer during 2019.

If the Eligible Employer averaged more than 100 full-time employees in 2019, qualified wages are the wages paid to an employee for time that the employee is not providing services due to an economic hardship, specifically, either (1) a full or partial suspension of operations by order of a governmental authority due to COVID-19, or (2) a significant decline in gross receipts.  For these employers, qualified wages taken into account for an employee may not exceed what the employee would have been paid for working an equivalent duration during the 30 days immediately preceding the period of economic hardship described in (1) or (2) above. 

If the Eligible Employer averaged 100 or fewer full-time employees in 2019, qualified wages are the wages paid to any employee during any period of economic hardship described in (1) or (2) above.

For more information, see Determining Qualified Wages.

7. What are “qualified health plan expenses”?

Qualified health plan expenses are amounts paid or incurred by an Eligible Employer that are properly allocable to employees’ qualified wages to provide and maintain a group health plan, but only to the extent that these amounts are excluded from the employees’ gross income.

For more information, see Determining the Amount of Allocable Qualified Health Plan Expenses.

8. Is an Employer required to pay qualified wages to its employees under the CARES Act?

No.  The CARES Act does not require employers to pay qualified wages.  In addition, Eligible Employers may elect to not claim the Employee Retention Credit. 

9. Can Eligible Employers claim the Employee Retention Credit for qualified wages paid in March 2020?

Eligible Employers may claim the Employee Retention Credit for qualified wages that they pay after March 12, 2020, and before January 1, 2021.  Therefore, an Eligible Employer may be able to claim the credit for qualified wages paid as early as March 13, 2020.

10. May an Eligible Employer receive the Employee Retention Credit for wages paid after December 31, 2020?

No.  The Employee Retention Credit is only available with respect to wages paid after March 12, 2020, and before January 1, 2021.

11. Against what employment taxes does the Employee Retention Credit apply?

The credit is allowed against the employer’s share of social security taxes under section 3111(a) of the Internal Revenue Code (the “Code”), and the portion of taxes imposed on railroad employers under section 3221(a) of the Railroad Retirement Tax Act (RRTA) that corresponds to the social security taxes under section 3111(a) of the Code.

12. What makes the Employee Retention Credit “fully refundable”?

The credit is fully refundable because the Eligible Employer may get a refund if the amount of the credit is more than certain federal employment taxes the Eligible Employer owes.  That is, if for any calendar quarter the amount of the credit the Eligible Employer is entitled to exceeds the employer’s share of the social security tax on all wages (or on all compensation for employers subject to RRTA) paid to all employees, then the excess is treated as an overpayment and refunded to the employer under sections 6402(a) and 6413(a) of the Internal Revenue Code (the “Code”).  Consistent with its treatment as an overpayment, the excess will be applied to offset any remaining tax liability on the employment tax return and the amount of any remaining excess will be reflected as an overpayment on the return.  Like other overpayments of federal taxes, the overpayment will be subject to offset under section 6402(a) of the Code prior to being refunded to the employer. 

For more information on the reduction in deposits for the credit and deferral of payment and deposit of the employer’s share of social security taxes due before January 1, 2021 under section 2302 of the CARES Act, see Deferral of employment tax deposits and payments through December 31, 2020.

For more information on the claiming the refundable Employee Retention Credit, see How to Claim the Employee Retention Credit.

13. Are Eligible Employers required to withhold federal employment taxes on qualified wages paid to employees?

Yes.  Qualified wages are wages subject to withholding of federal income tax and both the employer’s and employee’s shares of social security and Medicare taxes. (See How to Claim the Employee Retention Credit for information regarding an Eligible Employer’s ability to retain the federal income tax withholding and the employees share of social security and Medicare taxes in an amount equal to the Employee Retention Credit.)  Qualified wages are also considered wages for purposes of other benefits that the employer provides, such as contributions to 401(k) plans.

14. May an Eligible Employer receive both the tax credit for qualified leave wages under the FFCRA and the Employee Retention Credit under the CARES Act?

Yes, but not for the same wages.  The amount of qualified wages for which an Eligible Employer may claim the Employee Retention Credit does not include the amount of qualified sick and family leave wages for which the employer receives tax credits under the FFCRA.

For more information, see Interaction with Other Credit and Relief Provisions.

15. May an Eligible Employer receive both the Employee Retention Credit and a Paycheck Protection Program (PPP) loan that is authorized under the CARES Act?

No.  An Eligible Employer may not receive the Employee Retention Credit if the Eligible Employer receives a PPP loan that is authorized under the CARES Act.  An Eligible Employer that receives a PPP loan should not claim Employee Retention Credits.

For more information, see Interaction with Other Credit and Relief Provisions.

Get Money Back! Covid-19 Related Employee Retention Credits.

be Prepared

Documents Required for ERTC

The best strategy to follow before you apply for these loans is to be prepared. The more readily available your documentation is, the faster you’ll move through the process.

The following is a checklist of the most commonly collected documents.

Quarterly Payroll Reports

Q2, Q3 & Q4 2020 Payroll reports that show the earnings for each employee for each Quarter. If you are in NY Form NYS-45 will have this information. You can also run payroll registers covering the applicable time period. Please provide a SUMARRY report (i.e. each employee totaled for the Quarter).

Payroll Register

Payroll register from 3/12/20-3/31/21 (total if multiple pay cycles fall in this period). This needs to show earnings PER EMPLOYEE.

Driver's License & Voided Check

To ensure all of your information is correct on the contracts, we require a clear copy of you DL & VC to verify this information.

Other Articles You May Want to Read

ppp loan
COVID-19 Resources
Upwise Capital

New PPP Guidance

New PPP Guidance for Small Businesses Navigate The pandemic continues to impact small businesses, and we applaud Congress for providing much-needed relief by reopening the

Read More »
COVID-19 Resources
Upwise Capital

Questions about PPP and EIDL Loan

Answering Questions About the Paycheck Protection Program and Economic Injury Disaster Loan SHARE Share on facebook Share on twitter Share on linkedin Two weeks ago

Read More »

We are proud and dedicated to serving small businesses.

Join over 2,500 Clients who love us.

google my business reviews - upwise capital
Very Pleased!
Upwise Capital is absolutely the best! Joe is amazing to work with and we were successful in obtaining PPP funding with little to no stress, which is important during these very difficult times. Will continue to use Upwise Capital for our funding needs.
Jack — Business Owner
trustpilot 5 star rating upwise capital
Fast & Easy Process.
After attempts with Bank of America and another bank I had many decades of relationships with; I couldn’t get my PPP approved; mostly due to the huge volume of applicants. Upwise got me funded in 48 hours! Bravo.
Chris — Owner.
best company logo navy
Excellent Service!
Excellent Service, very professional and always available to answer questions and concerns. I will defenitely use their services again!
Claudio — Business Owner
trustpilot 5 star rating upwise capital
Upwise Comes Through!
Joe Lustberg sent me to 2 different SBA Lenders when my bank was not ready to accept PPP applications and the SBA had run out of funds. My company was very busy assisting our clients in their own PPP applications, and here we were unable to apply ourselves. I applied to both lenders and within 1 week we received an approval from 1 of the lenders. Today, we received our funding and I couldn't be more grateful to Joe and his team at Upwise.
Jody — CPA.
google my business reviews - upwise capital
Remarkably Transparent.
Could not have had a better experience. Very professional, very transparent of the whole process, and very responsive to assist during a stressful and confusing time.
George — Co-Founder.
best company logo navy
Very Professional
I needed a new piece of equipment for my asphalt business and was recommended to Upwise by a friend. I showed them the equipment I wanted and who I was buying it from and they got it for me - within 2 weeks it was at my job site being used. Will def use again.
Jose — Business Owner

Our Awesome Clients

The Wise, Fast & Transparent Solution for your business.