ERC Credit FAQ #44. How Does An Employer That Started A Business In 2019 Determine Whether It Had A Significant Decline In Gross Receipts For Purposes Of The Employee Retention Credit?

ERC Credit FAQ #44. How Does An Employer That Started A Business In 2019 Determine Whether It Had A Significant Decline In Gross Receipts For Purposes Of The Employee Retention Credit?

Frequently asked question #44 “How does an employer that started a business in 2019 determine whether it had a significant decline in gross receipts for purposes of the Employee Retention Credit?” under the Determining When an Employer is Considered to have a Significant Decline in Gross Receipts section of FAQs: Employee Retention Credit under the CARES Act, provided by the IRS.gov to help business owners understand the ERC program. Information is below for the question #44 How does an employer that started a business in 2019 determine whether it had a significant decline in gross receipts for purposes of the Employee Retention Credit?

ERC Credit Frequently Asked Question #44:

Determining When an Employer is Considered to have a Significant Decline in Gross Receipts and Maximum Amount of an Eligible Employer’s Employee Retention Credit FAQs

44. How does an employer that started a business in 2019 determine whether it had a significant decline in gross receipts for purposes of the Employee Retention Credit?

An employer that started a business in the first quarter of 2019 should use the gross receipts for the applicable quarter of 2019 for comparison to the gross receipts for the same quarter in 2020 to determine whether it experienced a significant decline in gross receipts in any quarter of 2020.

An employer that started a business in the second quarter of 2019 should use that quarter as the base period to determine whether it experienced a significant decline in gross receipts for the first two quarters in 2020 and should use the third and fourth quarters of 2019 for comparison to the third and fourth quarters of 2020, respectively, to determine whether it experienced a significant decline in gross receipts for those quarters.

An employer that started a business in the third quarter of 2019 should use that quarter as the base period to determine whether it experienced a significant decline in gross receipts for the first three quarters in 2020 and should use the fourth quarter of 2019 for comparison to the fourth quarter of 2020 to determine whether it experienced a significant decline in gross receipts for that quarter.

An employer that started a business in the fourth quarter of 2019 should use that quarter as the base period to determine whether it had a significant decline in gross receipts for any quarter in 2020.

If the employer commenced business in the middle of a quarter in 2019, the employer should estimate the gross receipts it would have had for the entire quarter based on the gross receipts for the portion of the quarter that the business was in operation.

For more Internal Revenue Service (IRS) Department of the Treasury Employee Retention Credit (ERC) Determining When an Employer is Considered to have a Significant Decline in Gross Receipts FAQs, visit the official IRS.gov tax website.

Conclusion and Summary on ERC Credit FAQ #44. How does an employer that started a business in 2019 determine whether it had a significant decline in gross receipts for purposes of the Employee Retention Credit?

The “How does an employer that started a business in 2019 determine whether it had a significant decline in gross receipts for purposes of the Employee Retention Credit?” is Frequently Asked Question #44 of many commonly asked questions small business owners are wondering about how to file the Employee Retention Tax Credit (ERTC). The IRS ERC Tax Credit program is a confusing and complex process to determine the correct ERC calculations your business qualifies for. Answers to “How does an employer that started a business in 2019 determine whether it had a significant decline in gross receipts for purposes of the Employee Retention Credit?” and filling out form 941-X may change slightly from frequently updated rules and regulations from the IRS. Leave a comment below if you have further questions on ERC Credit FAQ #44.

Help Completing / Filing / Claiming the Employee Retention Credit (ERC)

Receive Up to a $26,000 ERC Credit from the IRS Per Employee

Disaster Loan Advisors can assist your business with the complex and confusing Employee Retention Credit (ERC), Form 941-X, and the Employee Retention Tax Credit (ERTC) program. 

Depending on eligibility, business owners and companies can receive up to $26,000 per employee based on the number of W2 employees you had on the payroll in 2020 and 2021.

The ERC / ERTC Tax Credit Program is a valuable IRS tax credit you can claim. This is money you have already paid to the IRS in payroll taxes for your W2 employees.

We DO NOT charge a percentage (%) of your ERC Refund like some companies are charging. Some ERC firms out there are charging upwards of 15% to 35% of your ERC refund!

Our professional ERC fee and pricing structure is very reasonable in comparison.

If you are looking for an ERC Company that believes in providing professional ERC Services and value, in exchange for a fair, reasonable, and ethical fee for the amount of work required, Disaster Loan Advisors is a good fit for you.

Schedule Your Free Employee Retention Credit Consultation to see what amount of employee retention tax credit your company qualifies for.

Cover Image Credit: Irs.gov / ERC FAQ / Disaster Loan Advisors.

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