What you need to know: Paycheck Protection Program (PPP) VS the Employee Retention Tax Credit (ERTC)

With many businesses facing economic hardship during a global pandemic, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) provides relief. Under this legislation, business owners were given two recovery options: the Paycheck Protection Program (PPP) or the Employee Retention Tax Credit (ERTC). Because the PPP loan can be forgiven, many businesses chose to forgo the ERTC.

The Consolidated Appropriations Act (CAA), passed in December of 2020, allows for small businesses to take advantage of both programs for 2020 and2021. This means businesses that have already claimed the PPP loan can now claim the ERTC too. The CAA also expanded the PPP for round 2 and the ERTC by increasing the credit amount paid to employers.

The Infrastructure Investment and Jobs Act, passed on November 15, 2021, ended fourth quarter eligibility for the ERTC for 2021. The ERTC can be claimed only for 2020 and Quarter 1 through Quarter 3 of 2021.

Let’s look at the PPP and ERTC and how to maximize both. It is important to note that wages used for the PPP loan cannot be used for the ERTC.  


The Paycheck Protection Program is a forgivable loan helping employers to pay employees.

The loan is calculated using 2.5 months of average monthly payroll costs.Businesses could receive up to $10 million. The CAA allowed employers to receive an additional round of PPP up to $2 million. Borrowers have up to 24 weeks to use 60% of the loan towards payroll costs. If a business can use 40% of the loan towards non-payroll costs, this helps to maximize the ERTC.


The Employee Retention Tax Credit is a refundable payroll tax credit claimed on an employer’s federal employment tax return.

For 2020 (specifically March 13, 2020 through December 31, 2020), an employer can receive a maximum of $5,000 per employee. This is 50% of the first$10,000 of qualifying wages paid per employee. For each quarter of 2021, an employer can receive a maximum of $7,000 per employee. This is 70% of the first$10,000 of qualifying wages paid per employee. For example, if a business qualifies for Q1 through Q3 of 2021, the employer could receive a maximum of$21,000 per employee.


Does your business qualify for ERTC?

There are two tests for qualification: gross receipts or government mandates. If your business does not meet the gross receipts criteria, we will look at government mandates.

1.    Gross Receipts

a.    In 2020:  Any quarter with less than 50% of gross receipts for the same quarter in 2019. Eligibility continues for each quarter in decline until gross receipts reach greater than 80% of the same quarter of2019.

b.    In 2021:  Any quarter with less than 80% of gross receipts for the same quarter in 2019.

2.     Government mandates in 2020 and 2021: Any federal, state, or local mandate that partially of fully suspended business operations.

Even if your business increased its gross receipts during 2020 and 2021, you are still eligible for the credit if a government mandate partially affected your business operations.

Most businesses qualify for the Employee Retention Tax Credit. If you area business owner looking to participate in the ERTC, please sign up with OnCentive today. We encourage you to take this opportunity to reward your business for retaining employees during a global pandemic. OnCentive knows firsthand how important this credit can be to the survival of a business going through an economic recovery period. We have calculated over $120 million in ERTC credits. Our team qualifies businesses and calculates their ERTC credits every single day. We are dedicated to you every step of the way.


If you would like more information on the ERTC and how your business can participate, please call today at 256-680-9107.



Michelle Minogue
OnCentive National Sales Manager

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