If you have a third party prepare your payroll reports, then we recommend that you ask them to delay filing of your Q4 form 941. The report is not due until January 31.
These 2 issues are unclear at this point:
- Is the 70% retroactive back to March 13, 2020, or does it begin January 1, 2021?
- Is it quarter-by-quarter that you are able to take the ERTC of up to $10K per employee in 2020, or is the $10K for the whole year? Meaning, is there a re-start every quarter. We know that it is a restart every quarter, beginning 2021.
These details are known at this point:
- You are eligible for ERTC for any quarter where your gross revenue has gone down by 20% or greater for any quarter, when compared to the same quarter in 2019. This applies for all quarters March 13, 2020 thru June 30, 2021.
- You can now take the ERTC, retroactive to March 13, 2020, even if you received the PPP. You cannot take the ERTC for any portion of wages that were used for PPP forgiveness. This makes it very important that you request forgiveness for all other qualified expenses before payroll.
- Calculate the ERTC using IRS form 7200.
- Do not go back and amend form 941s thru Q3 of 2020. Instead, apply any 2020 ERTC to your Q4 form 941.
- For Q1 and Q2 of 2021, apply the ERTC for each quarter as it applies.
- For wages paid between January 1, 2021 and July 1, 2021, the credit is increased from 50% to 70% of qualified wages, and each employee’s allowable wage amount increases from $10K per year to $10K per quarter.