Posted by ACCU Staff ● Jun 15, 2021 11:00:25 AM

Employee Retention Tax Credit: Case Study #4


The CARES Act includes an Employee Retention Tax Credit (“ERC”), a fully refundable tax credit for employers equal to seventy percent (70%) of qualified wages (including allocable qualified health plan expenses) that Eligible Employers pay their employees in each quarter in 2021, or fifty percent (50%) of qualified wages for the 2020 calendar year. Employers can claim an ERC of up to $7,000 per calendar quarter per employee for qualified wages paid between January 1, 2021 and December 31 2021, and up to $5,000 per year for wages paid between March 13, 2020 and December 31, 2020.

Case Study #4

A private university in Indiana with approximately 750 full time employees was greatly impacted by COVID-19 largely due to governmental orders and changes in procedures. The governmental orders included a state order to limit non-essential gatherings and social events, and encouraged employers to allow employees to telecommute, in addition to a state mandated order to stay at home. The university suspended in-person courses for a period of time and urged students to depart from campus. The fall semester experienced many procedural changes including, but not limited to, enhanced cleaning protocols, requirement for every student and faculty or staff member to wear masks on campus, and social distancing.

An alumnus referred the university Board members to us, even though at the time they were working with one of the Big 4 on calculating the Employee Retention Credit. After understanding our knowledge, experience, and expertise in calculating, processing, and maximizing these types of credits, the university decided to go with us. While we are still in the process of collecting data to calculate the credit, we estimate the university should receive over $1M in credits.

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