How To Determine If Your Business Qualifies For ERTC Tax Credits

ERTC Tax Credits

If you’re like many business owners, you’re probably working hard day in and day out to keep your company afloat in the sea of competition. You’ve probably done everything by the book, following all the rules and regulations to ensure your business runs smoothly. However, you could be missing out on serious tax credits that could boost your business. 

The Employee Retention Tax Credit (ERTC) is a hidden gem in the tax world, offering eligible businesses a refund per employee. But the catch is not every business qualifies. So the question remains: does your business qualify for ertc tax credit? This article dives deep into the nitty-gritty of ERTC eligibility to help you determine whether your business has what it takes to cash in on this sweet tax credit. Keep reading. 

Revenue Decline

You might be wondering why a business needs to have a revenue decline to qualify for the Employee Retention Tax Credit (ERTC). After all, shouldn’t companies be rewarded for being successful?

While that may be a fair point, the ERTC was designed specifically to help businesses that the COVID-19 pandemic has impacted. Many businesses have had to shut down or reduce operations due to stay-at-home orders and other government mandates, resulting in a significant decline in revenue.

The ERTC requires revenue decline to ensure that it targets businesses that need it most. It provides financial relief to businesses struggling to keep their doors open and retain employees during challenging times.

Moreover, the revenue decline requirement is a way to prevent abuse of the ERTC program. Without this requirement, businesses not significantly impacted by the pandemic could potentially claim the credit, diverting resources away from businesses that truly need it.

So, for your business to qualify for an ERTC tax credit, it must have had a 20% or more decline in gross receipts in a quarter of 2020 or 2021 compared to the same quarter in 2019.

Suspended Operations

If you’re a business owner who has had to suspend operations due to the COVID-19 pandemic, you may qualify for an ERTC tax credit. This tax credit can help you to offset some of the costs associated with retaining employees during the shutdown.

And, even though your business may not be operating, you may still have ongoing expenses such as rent, utilities, and insurance. By providing a tax credit for employee retention during the shutdown, the ERTC will alleviate some of the financial burdens that your business is facing.

If you’re planning to reopen your business, the ERTC can give you the much-needed boost to get your business up and running again. 

Employee Retention 

To qualify for the ERTC tax credit, your business must have retained its employees during the pandemic. This means your company did not lay off or terminate employees due to COVID-19 and did not reduce employee wages by more than 25%. 

There may be additional requirements and limitations for ERTC, such as the number of employees and the amount of credit you can claim. As such, you should consult with a tax professional or refer to the latest IRS guidelines to ensure you meet the eligibility criteria.


The ERTC tax credit was designed to offset some of the costs of retaining employees during the pandemic. If you’re eligible, taking advantage of this opportunity is advisable. Taking advantage of the ERTC, will restore the financial stability of your business and let you retain your valuable employees. Contact a tax professional today to get started on your journey.