Employee Retention Credit

July 12, 2023
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khopkins@hardingpoorman.com

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Qualification Questionnaire

To determine if your organization qualifies for an Employee Retention Credit for 2020 answer the following questions:

  1. Did the business employ fewer than 100 employees in 2019?
  2. Was the business fully or partially shut down by government order for any quarter in 2020, OR were gross receipts for any 2020 calendar quarter 50% lower than the same quarter in 2019? (If yes, then each subsequent quarter would qualify until gross receipts exceed 50% of the 2019 comparable quarter.)

If you answered “NO” to either of the above questions, your organization does not qualify for the ERC credit for 2020, but you may qualify in 2021 (see below).
If you answered “YES” to both questions #1 and #2, continue to question #3:

  1. Did the business pay salaries or wages during the qualifying quarter under question #2 that were not reported on a PPP forgiveness application or used for any other credit?

If you answered “YES” to question #3, you qualify for an ERC in 2020 and you should contact your Watermark representative to assist you in applying for a
retroactive payroll tax credit.

To determine if your organization qualifies for an Employee Retention Credit for 2021 answer the following questions:

  1. Did the business employ fewer than 500 employees in 2019?
  2. Was the business fully or partially shut down by governmental order for any quarter in 2021, OR were gross receipts for any 2021 calendar quarter 20% lower than the same quarter in 2019? (Businesses may elect to compare the prior quarter to 2019. For example, 1Q 2021 eligibility can be determined by comparing 4Q 2020 to 4Q 2019)

If you answered “NO” to either of the above questions, your organization does not qualify for the ERC credit for 2021.
If you answered “YES” to both questions #1 and #2, continue to answer question #3:

  1. Did the business pay salaries or wages during the qualifying quarter under question #2 that will not be reported on a PPP forgiveness application or used for any other credit?

If you answered “YES” to question #3, you qualify for an ERC in 2021 and you should contact your Watermark representative to assist you in applying for a retroactive payroll tax credit.