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CARES Act Employee Retention Credit

Has your business been impacted by COVID but still supporting your employees? You could be eligible for a refundable retention credit of up to $26,000 per employee.

The CARES Act was signed into law on March 27, 2020, to address the negative economic impact of the COVID-19 pandemic. Within the CARES Act, Congress created the Employee Retention Credit (“ERC”), a fully refundable payroll tax credit, to provide aid to employers impacted by the COVID-19 pandemic.

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    The Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) was signed into law on March 27, 2020, to address the negative economic impact of the COVID-19 pandemic. Within the CARES Act, Congress created the Employee Retention Credit (“ERC”), a fully refundable payroll tax credit, to provide aid to employers impacted by the COVID-19 pandemic.   

    As originally passed, the ERC was available to eligible employers from March 13, 2020, to December 31, 2020, and was equal to 50% of up to $10,000 in qualified wages paid to an employee during the year—a credit opportunity of up to $5,000 per employee for the 2020 tax year. Subsequent legislation (the Consolidated Appropriations Act, the American Rescue Plan Act, and the Infrastructure Bill) was enacted to address the continued economic impact of the COVID-19 pandemic which included certain enhancements and amendments to the ERC. Among the enhancements were:  

    1. an extension of the ERC through September 30, 2021; and  
    2. an increase of the ERC to 70% of up to $10,000 in qualified wages paid to an employee per quarter—an increase in the credit opportunity to $7,000 per employee per quarter for the 2021 tax year.

    ERC Overview

    Eligibility for the ERC is evaluated on a quarterly basis and is based on each employer’s specific facts and circumstances. An employer is eligible for the ERC if it experienced either:  

    1. a full or partial suspension of business operations due to orders from an appropriate governmental authority limiting commerce, travel, or group meetings (for commercial, social, religious, or other purposes) due to COVID-19; or  
    2. a significant decline in gross receipts (50% decline in gross receipts in 2020 compared to the same quarter in 2019; 20% decline in gross receipts in 2021 compared to the same quarter in 2019).   

    Subject to certain limitations, PPP recipients and certain instrumentalities of the government are generally permitted to claim the ERC if they meet one of the above eligibility tests.  

    Employers who are eligible for the ERC in a given quarter may qualify for 50% of up to $10,000 in qualified wages in 2020 per employee for the year, and 70% of up to $10,000 in qualified wages per employee, per quarter in 2021. The total potential ERC for an employer is $26,000 per employee.  

    The wages that may qualify for the ERC (the “Qualified Wages”) varies depending on an employer’s average full-time headcount in 2019.  A “small” employer’s Qualified Wages during an eligible quarter may include all wages paid and employer paid qualified health plan costs.  Qualified Wages for a “large” employer during an eligible quarter are wages paid not in exchange for a service and an allocable portion of employer paid qualified health plan costs.   

    A “small” employer is defined in 2020 as an average of 100 or less full-time employees in 2019, and an average of 500 or less full-time employees in 2019 for the 2021 credit.  A “large” employer is defined in 2020 as an employer with an average of more than 100 full-time employees during 2019, and an average of more than 500 full-time employees in 2019 for the 2021 credit.   

    Small Employers
    2020 <100
    2021 <500
    Large Employers
    2020 100+
    2021 500+

    The ERC can be monetized by completing an IRS Form 941-X and requesting a refund from the IRS. 

    Synergi is prepared to guide you through this process. Reach out to us now to get started:

    Operational Impact
    Full Or Partially Suspended Operation
    Payroll Tax Credit
    Refundable
    HCM Unlocked

    Federal Hiring Incentives

    Work Opportunity Tax Credit (WOTC)

    The Work Opportunity Tax Credit (WOTC) is a federal hiring incentive program that allows your business to receive up to $9,600 in tax credits per each eligible new hire.

    The partnership between HCM Unlocked and Synergi positions you for success, growth and profitability. We recognize your need for great talent and industry leading tax credit consulting and technology. We look forward to having you as part of our family. Please follow the instructions below to get started.

    The Work Opportunity Tax Credit is a federal hiring incentive that provides a tax credit worth up to $9,600 if your company is hiring from any one of the following groups:

    • A member of a family that is a Qualified Food Stamp Recipient
    • A member of a family that is a Qualified Aid to Families with Dependent Children (AFDC) Recipient
    • Qualified Veterans
    • Qualified Ex-Felons, Pardoned, Paroled or Work Release Individuals
    • Vocational Rehabilitation Referrals
    • Qualified Summer Youths
    • Qualified Supplemental Security Income (SSI) Recipients
    • Qualified Individuals living within an Empowerment Zone or Rural Renewal Community
    • Long Term Family Assistance Recipient (TANF) – formerly known as Welfare to Work
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    Tax credits off-set tax liability dollar for dollar. Some companies use credits in their tax planning to off-set quarterly estimated payments. Some companies use credits at the end of their tax year against annual tax liability. In the event of no tax liability, tax credits can be carried forward for up to twenty years. Consult with your tax professional for how to best use these incentives.

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    The life of a tax credit can be a year or more. The process begins with screening your new hires and ends with delivery of a certified and calculated tax credit. We manage this for you.

    Synergi beats the competition when it comes to screening, eligibility, forms compliance, certifications, and reporting

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    Built right into the platform, we screen eligibility and sign forms as you process hires.

      How To Get Started?

      Register Yourself

      Fill out the form and submit your contact information.

      Contact

      A Synergi Rep will contact you to discuss the next steps.

      Close

      Synergi will notify that you are ready to go. Sit back and start earning credits.

      Why Synergi Partners

      We focus solely on tax credit and disaster relief and capture the maximum credits for our clients.

      Questions? Contact Lee Edenfield (404) 663-1587 or

      Questions?

      Contact Lee Edenfield (404) 663-1587 or

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