Tax Update Blog

ERC Expansion Benefits Startup Businesses – potentially up to $100,000

May 4, 2021 | Blog
By Jim Donovan, CPA

The recently-passed American Rescue Plan Act of 2021 provides up to $100,000 in tax savings for startups under an expansion of the Employer Retention Credit.

This new benefit applies to startup businesses that began a new business after February 15, 2020. If the business is a "Recovery Startup Business," the business may qualify for a credit up to $50,000 per quarter for the third and fourth calendar quarters of 2021.

To qualify you must meet the following criteria:

The new business was started after February 15, 2020.
The business has average annual gross receipts not exceeding $1,000,000.

Guidance may be released with additional criteria. 

If your business qualifes, or if you have questions regarding the ERC, contact us.

Related: The Employee Retention Credit – Extended and Expanded (Again)

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