Employee Retention Credit

Expanded Savings Opportunity in 2023

In the second year of the COVID-19 pandemic, many Denver businesses continue to face challenging economic conditions. Through a combination of modified operating hours, forced location closures, and new employee/customer health safety requirements, many continue to struggle. Matters have become especially frustrating as it is unclear when the emergency will finally end.

In late December, Congress passed a second COVID-19 relief bill which provided much-needed relief for Colorado businesses, families, and individuals. While comprehensive, there is an immediate opportunity to take advantage of the expanded Employee Retention Tax Credit. Many are unaware of the important changes made which expand eligibility and sharply increase the saving opportunity.

What is the Employee Retention Tax Credit (ERC)?

The Employee Retention Tax Credit is a refundable payroll tax credit available to businesses and nonprofits. When launched as part of the CARES Act, it provided a $5,000 per employee, per year credit for those with less than 100 employees experiencing either a forced shutdown or a 50% reduction in gross receipts. Unfortunately, Paycheck Protection Program (PPP) recipients could not participate.   

What Changed?

The COVID-19 relief legislation has not only extended the ERC, but has made several changes to expand eligibility, increase savings and even added a retroactive provision for PPP loan recipients. The ERC has been extended through December 31, 2021, increasing the per employee maximum, per year to $14,000 and expanded eligibility to include those with only a 20% reduction in gross receipts.

Hanson ERC Study

The Hanson tax team can review your business, determine eligibility, and identify the potential savings amount. We will make the necessary calculations, compile required documentation, prepare all filings, and submit to the IRS. Since you can claim the credit at any time there is no reason to wait to get started.