Are You Eligible to Claim the Employee Retention Tax Credit (ERTC) In Q3 or Q4 of 2021?

For the third and fourth calendar quarters of 2021, an employer may be eligible for the employee retention credit with respect to a calendar quarter if

• the operation of the employer’s trade or business is fully or partially suspended due to orders from an appropriate governmental authority limiting commerce, travel, or group meetings (for commercial, social, religious, or other purposes) due to the coronavirus disease 19 (COVID-19),
• For the third and fourth calendar quarters of 2021, an employer may be eligible for the employee retention credit with respect to a calendar quarter if

1. the operation of the employer’s trade or business is fully or partially suspended due to orders from an appropriate governmental authority limiting commerce, travel, or group meetings (for commercial, social, religious, or other purposes) due to the coronavirus disease 19 (COVID-19),
2. or the employer experiences a decline in gross receipts.  For the calendar quarter gross receipts must be less than 80 percent of its gross receipts for the same calendar quarter in 2019. Accordingly, for purposes of the employee retention credit for the third and fourth calendar quarters of 2021, the determination of whether an employer is an eligible employer is based on a decline in gross receipts made separately for each calendar quarter and is based on an 80 percent threshold,
3. or “recovery startup businesses” may be eligible employers for those calendar quarters.  Section 3134(c)(5) of the Code defines a “recovery startup business” as an employer
   1.  that began carrying on any trade or business after February 15, 2020,
   2. for which the average annual gross receipts of the employer for the 3-taxable-year period ending with the taxable year that precedes the calendar quarter for which the credit is determined does not exceed $1,000,000, and
   3. that is not otherwise an eligible employer due to a full or partial suspension of operations or a decline in gross receipts.

In the case of an eligible employer that is a recovery startup business, the amount of the credit allowed for each of the third and fourth calendar quarters of 2021 cannot exceed $50,000.