EMPLOYEE RETENTION TAX CREDIT The Benefit That Keeps On Giving … For Up To Three Years!
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ince its rollout last year, ORLA has consistently reported on the potential benefits of the Employee Retention Tax Credit (ERTC). The benefit is still available but time, and patience, is critical. Application for ERTC is open to any qualified employer who has filed a 941 tax form from March 12, 2020 (when the program started) through September 30, 2021 (when the program ended). This credit helps any qualified employer– not just restaurants and lodging operators– put their hard-earned money back into operations. Just ask John Barofsky, current ORLA Chair and co-owner of Beppe & Gianni’s Trattoria in Eugene. “Being a small independent operator, the ERTC was an unexpected but welcome boost to my operation’s ability to stay open and maintain staff through the pandemic. Although at first the process of the credit seemed daunting, the time I spent was well worth the return. The ability to defray payroll costs and tax payments had a great impact on my cash flow and bottom line.” Another ORLA member who benefitted from ERTC is Drew Roslund with the Overleaf Lodge & Spa and The Fireside Motel, both in Yachats, Oregon. “The ERTC was comparable in size and scope to the Paycheck Protection Program for many organizations. It was tough waiting seven to eight months for refunds but just knowing that we qualified gave us enough confidence to keep team members employed and increase wages, especially during the busy summer season on the Oregon coast. Roughly the equivalent of a month’s worth of gross revenue, we were able to lock in some
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Oregon Restaurant & Lodging Association | SPRING 2022
necessary incentive pay for key staff and even tackle a few deferred maintenance projects.” To review, the original ERTC program was enacted by the CARES Act in 2020 and allows a tax credit of up to 50 percent of each employee’s share of social security qualified wages, per year. With the Consolidated Appropriations Act of 2021, the ERTC program was expanded to allow a tax credit of up to 70 percent of each employee’s share of social security qualified wages, per quarter. The 2021 Act added a 500-employee maximum1 for employers who could access the ERTC program. As of this writing, the final change in the ERTC storyline came with the passage of the Infrastructure Investment and Jobs Act in 2021, which terminated the ERTC on 9/30/21, instead of terminating on 12/31/21.
Employee Retention Tax Credit (ERTC)
Credit Calculation:
Wages/Heath Care Cap: Max Credit per Employee: Time Period:
2020
2021
50% of up to $10,000 of wages per employee per year
70% of up to $10,000 of wages per employee per quarter
Annually
Quarterly
$5,000
$28,0002
3/21/20 – 12/31/20
1/1/21 – 9/30/21
