My Revenue Went Up in 2020, Can I Still Qualify for the ERC Program?
If you’re reading this, you likely already know about Employee Retention Credit or ERC. However, here is just a little background information. ERC is a government tax credit that was implemented by the government in order to help businesses that were negatively affected by the COVID pandemic.
ERC is available to businesses that retained their employees during a part or full suspension of business operations or saw a significant decline in sales revenue. However, many business owners are asking the question, “my revenue went up in 2020, can I still qualify for the ERC program?”
The Short Answer
The short answer is no. If a business’s revenue increased in 2020, it cannot qualify for the ERC. The ERC is only available to businesses that experienced a significant decline in sales, which is equal to 20% or more compared to the same quarter in the previous year. If a business’s revenue increased in 2020, it does not meet the ERC eligibility criteria.
The Long Answer
While the short answer is no, there are some caveats to consider. The eligibility for the ERC is determined on a quarterly basis. This means that if a business’s revenue increased in one quarter but declined in another, it may still be eligible for the ERC for the quarter in which it experienced a significant decline in gross receipts.
For example, let’s say a business had an increase in revenue in the first quarter of 2020 compared to the same quarter in 2019. However, things may be different if COVID caused a significant decline in the second quarter of 2020. In this scenario, the business would be eligible for the ERC for the second quarter of 2020, even though its revenue increased in the first quarter.
It’s important to note that the eligibility for the ERC is determined on a quarterly basis, so a business must demonstrate a significant decline in gross receipts for each quarter in which it claims the credit.
A professional accounting firm or ERC specialist can help determine eligibility and ensure that if qualified, a business properly files the IRS forms. ERCreviews.com provides information about the top ERC companies that can help businesses through the process.
Conclusion
In summary, if a business’s revenue went up in 2020, it cannot qualify for the ERC. The ERC is only available to businesses that experienced a significant decline in gross receipts. However, businesses should consider their eligibility for the ERC on a quarterly basis.
If a business experienced a significant decline in gross receipts in one quarter, it may still be eligible for the ERC for that quarter, even if its revenue increased in another quarter. It’s important for businesses to understand the eligibility criteria for ERC, keep detailed records of their gross receipts, and consult an ERC specialist to ensure they are accurately claiming the credit.
If you’re reading this, you likely already know about Employee Retention Credit or ERC. However, here is just a little background information. ERC is a government tax credit that was implemented by the government in order to help businesses that were negatively affected by the COVID pandemic.
ERC is available to businesses that retained their employees during a part or full suspension of business operations or saw a significant decline in sales revenue. However, many business owners are asking the question, “my revenue went up in 2020, can I still qualify for the ERC program?”
The Short Answer
The short answer is no. If a business’s revenue increased in 2020, it cannot qualify for the ERC. The ERC is only available to businesses that experienced a significant decline in sales, which is equal to 20% or more compared to the same quarter in the previous year. If a business’s revenue increased in 2020, it does not meet the ERC eligibility criteria.
The Long Answer
While the short answer is no, there are some caveats to consider. The eligibility for the ERC is determined on a quarterly basis. This means that if a business’s revenue increased in one quarter but declined in another, it may still be eligible for the ERC for the quarter in which it experienced a significant decline in gross receipts.
For example, let’s say a business had an increase in revenue in the first quarter of 2020 compared to the same quarter in 2019. However, things may be different if COVID caused a significant decline in the second quarter of 2020. In this scenario, the business would be eligible for the ERC for the second quarter of 2020, even though its revenue increased in the first quarter.
It’s important to note that the eligibility for the ERC is determined on a quarterly basis, so a business must demonstrate a significant decline in gross receipts for each quarter in which it claims the credit.
A professional accounting firm or ERC specialist can help determine eligibility and ensure that if qualified, a business properly files the IRS forms. ERCreviews.com provides information about the top ERC companies that can help businesses through the process.
Conclusion
In summary, if a business’s revenue went up in 2020, it cannot qualify for the ERC. The ERC is only available to businesses that experienced a significant decline in gross receipts. However, businesses should consider their eligibility for the ERC on a quarterly basis.
If a business experienced a significant decline in gross receipts in one quarter, it may still be eligible for the ERC for that quarter, even if its revenue increased in another quarter. It’s important for businesses to understand the eligibility criteria for ERC, keep detailed records of their gross receipts, and consult an ERC specialist to ensure they are accurately claiming the credit.
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