When claimed on qualified wages, including many insurance costs, paid to employees, the ERTC is a refundable credit available through September 30, 2021 or December 31, 2021 for Recovery Startup Businesses (businesses started after February 15, 2020 with an income less than $1 million). The credit is available for 70% of up to $10,000 per employee per quarter. Most businesses with be able to claim $21,000 per employee for the first three quarters of 2021. Recovery Startup Businesses, through the American Rescue Plan Act are able to retroactively claim $50,000 per employee for the third & fourth quarters of 2021.

The majority of employers are eligible for ERTC. Following the passage of the American Rescue Plan Act, businesses having taken a loan under the Paycheck Protection Program, that were previously ineligible became eligible for the Tax Credit.

In order for a business to qualify for the Employee Retention Tax Credit, one of two factors must be met in the calendar quarter the employer wishes to use the credit.
1. Fully or partially suspended trades or businesses or those required to reduce business hours & operations due to government order. The credit is only applicable for the portion of the quarter that the business was effected, not the full quarter.
Based on guidance from the IRS, certain businesses generally do not meet this factor test and would not qualify.
- "Essential" businesses that were not shuttered or required to reduce operations, unless their supply of critical material/goods was disrupted & effecting their ability to operate.
- Shuttered businesses that were able to transfer their operations to remote models.
- These businesses could still qualify with the second factor:

2. A business that has seen a consequential decline in income
- CARES Act - 2020 Generally, if gross receipts in a calendar quarter are below 50% of gross receipts when compared to the same calendar quarter in 2019, an employer would qualify.
They are no longer eligible if in the calendar quarter immediately following their quarter gross receipts exceed 80% compared to the same calendar quarter in 2019.
- Consolidated Appropriations Act - 2021 Beginning in 2021, businesses must be impacted by forced closures or quarantines or have seen more than 20% drop in gross receipts in the quarter compared to the same quarter in 2019.
If you are a new business, the IRS allows the use of gross receipts for the quarter in which you started business as a reference for any quarter which they do not have 2019 figures because you were not yet in business.
- American Rescue Plan Act - 2021 In addition to eligibility requirements under the Consolidated Appropriations Act, 2021, business also have the option of determining eligibility based on gross receipts in the immediately preceding calendar quarter (compared with the corresponding quarter in 2019).

3. A unique category has been created for quarters three & four after the implementation of the American Rescue Plan Act 
- These businesses could still qualify with the second factor: Recovery Startup Businesses Began carrying on trade or business after Feb. 15, 2020
- Have annual gross receipts that do not exceed $1 million
- Are not eligible for the ERTC under the other two categories, partial/full suspension of operations or decline in gross receipts