Home » How will the newly issued safe harbor on ERC affect your business?

How will the newly issued safe harbor on ERC affect your business?

by Truevine

The Employee Retention Credit (ERC), introduced in the CARES Act, is a refundable payroll tax credit available to qualifying businesses negatively impacted by the COVID-19 pandemic.

On Aug. 10, the Treasury and IRS issued a safe harbor, allowing employers to exclude certain items from their gross receipts solely for determining eligibility for the ERC. That includes:

• The amount of the forgiveness of a Paycheck Protection Program (PPP) loan.

• Shuttered venue operators grants under the Economic Aid to Hard-Hit Small Businesses, Non-Profits and Venues Act.

•  Restaurant revitalization grants under the American Rescue Plan Act of 2021.

An employer elects to apply the safe harbor by excluding these amounts solely for determining whether it is an eligible employer for a calendar quarter for purposes of claiming the ERC on its employment tax return.

For more information on the Employee Retention Credit and to better understand if your firm qualifies for the credit, click here.

– Michael Belfer, Partner and Co-leader of Anchin’s Public Relations and Advertising Group

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