1. What is ERC Eligibility?

ERC (Employee Retention Credit) eligibility is determined by whether a business experienced a significant decline in gross receipts. A revenue decline of 20% or more compared to a prior period typically qualifies a business for this tax credit.

2. How Does the Calculator Work?

The calculator uses a simple formula:

Where:

• Revenue Decline — Percentage decrease in gross receipts
• 20% — Minimum threshold for eligibility

Explanation: If your revenue decline is 20% or greater, your business is generally eligible for the Employee Retention Credit.

3. Importance of ERC Eligibility

Details: Determining ERC eligibility is crucial for businesses seeking tax relief. The credit can provide significant financial assistance to eligible employers who kept employees on payroll during challenging economic periods.

4. Using the Calculator

Tips: Enter your revenue decline percentage. The calculator will immediately determine if you meet the minimum threshold for ERC eligibility.

5. Frequently Asked Questions (FAQ)

Q1: What time period should I compare for revenue decline?
A: Typically, you compare quarterly gross receipts to the same quarter in 2019, but consult a tax professional for specific guidance.

Q2: Are there other eligibility criteria besides revenue decline?
A: Yes, businesses may also qualify if they were fully or partially suspended due to government orders, regardless of revenue decline.

Q3: How is the credit amount calculated?
A: The credit is generally 70% of qualified wages paid, up to $10,000 per employee per quarter.

Q4: Can I claim ERC if I received PPP loans?
A: Yes, but not for the same wages used for PPP forgiveness. Different rules apply to different time periods.

Q5: Should I consult a professional about ERC?
A: Absolutely. ERC rules are complex and have changed over time. Professional guidance is recommended.