What is the CARES Act Employee Retention Credit? Exploring your Eligibility

As the COVID-19 pandemic stretches into its third holiday season, businesses continue to experience financial distress and hardships. The good news is that help is available through the Coronavirus Aid, Relief and Economic Security (CARES) Act Employee Retention Credit (ERC). The CARES Act ERC provides a fully refundable payroll tax credit to eligible employers negatively impacted by the pandemic.

Interested in learning more about whether you’re eligible for the Cares Act Employee Retention Credit? The NAF Association is partnering with Synergi Partners to help guide our members through the eligibility analysis process.

The CARES Act ERC can be ambiguous. With over 200 years of collective experience in the tax credit industry, Synergi Partners maintains strong relationships with members of Congress in order to stay up to date on the evolving legislation and its intent. The Synergi team does the heavy lifting for employers, helping you to better understand the complexities of the legislation to get your business back on track.

Understanding Cares Act Employee Retention Credit Eligibility Requirements
To qualify for the CARES Act ERC, eligible employers must meet either the Gross Receipts Test or the Government Orders Test, not both. In general, an employer is eligible under the Gross Receipts Test if they experienced a 50% decline in gross receipts in 2020 or a 20% decline in gross receipts in 2021 compared to 2019. An employer is eligible under the Government Orders Test if they experienced a full or partial suspension of business operations during the calendar quarter due to a government order limiting commerce, travel, or group meetings due to COVID-19.

How do you determine if you are eligible for the ERC? While the CARES Act ERC’s intent hasn’t changed, many of the original provisions have, leading to misconceptions about the credit. Here are six of the most common misconceptions about eligibility:

1. Revenue declines are a requirement.
2. A complete shutdown of operations is required.
3. PPP loan recipients are not eligible.
4. Public colleges, universities, and medical providers are not eligible.
5. Tax-exempt organizations are not eligible.
6. Size affects whether an employer is eligible.

Although understanding the requirements can be challenging, Synergi Partners will take out the guesswork and help you navigate the process.

Start your Eligibility Analysis Today
There are many factors in determining eligibility for the ERC. Tax credit processing is complex and dependent on each employer’s unique situation. The Synergi team provides individualized assessments of tax credit eligibility for each business based on their facts and circumstances to ensure every employer is optimizing credits. Contact the experienced employee retention consultants at Synergi to discover how you can optimize your tax credits.

Membership Has Its Benefits
Visit the NAF Association/Synergi partner portal to submit your information and get started today. NAF Association members are also invited to learn more about the ERC program. Register to join us on Tuesday, December 13 at 3:00 pm ET for an educational webinar to begin exploring how you can optimize your tax credits.