More money is now on the table for employers who lost revenue because of the COVID-19 pandemic and related government orders but kept paying their workers, local accountants say.

The Consolidated Appropriations Act of 2021 signed Dec. 27 by President Donald Trump altered and expanded eligibility for the employee retention credit, including retroactively in 2020 and through the first half of this year. The Coronavirus Aid, Relief, and Economic Security (CARES) Act had provided for the retention credit to encourage businesses to keep employees on their payroll.

The Paycheck Protection Program loans have received more attention, and previously employers couldn’t get the employee retention credit if they received PPP money, Sean R. O’Connell, partner and tax service regional leader at Newport News-based accounting and consulting firm PBMares, said during the firm’s “COVID-19 Response and Relief: What It Means For You” webinar on Jan. 7.

“This was a primary source of funding for businesses who didn’t get PPP,” he said.

That has changed, he said. Now you can receive both, but employers cannot use PPP funding and the employee retention credit covering the same wages.

“We can’t double dip,” added PBMares senior tax manager Kasey Pittman.

Businesses that either were fully or partially “shut down” during a period of time or that experienced a drop in revenue of 50% or more year over year in at least one quarter in 2020 may be able to claim an employee retention credit on their payroll tax returns, O’Connell said.

That credit, based on 50% of the wages paid during qualifying quarters, can be worth up to $5,000 per employee in 2020, Pittman said. Employers experiencing at least one quarter with a 50% loss in revenue remain eligible for the credit until the end of the quarter that gross receipts exceed 80% of the same quarter in 2019.

Businesses with more than 100 full-time employee equivalents are only eligible for the credit for the wages they paid employees not to work in 2020 in relation to a partial or full shutdown, Pittman said.

And if businesses don’t qualify according to the 2020 criteria, they may still qualify in 2021, which uses more liberal criteria, Pittman said.

In 2021, employers may qualify with a 20% loss in quarterly revenue, which can be compared to the same quarter of the last “normal” year of 2019, she said. This year, the credit is based on 70% of qualified wages up to a maximum credit of $7,000 per employee per quarter (or $14,000 per employee maximum). Additionally, the threshold increased to employers with more than 500 full-time employee equivalents only getting the credit for wages they paid employees not to work. That opens the benefit up to a lot more businesses, she said.

And it’s possible a business gets PPP funding for one period of time, like eight weeks of a quarter, and then claims the credit in the other five weeks of the quarter, Pittman and O’Connell explained. The forms used to claim the employee retention credit are meant to be filed quarterly, so keep in touch with a certified public accountant and work on filing, she said. Amended filings can be used to get the credit for 2020.

When the experts polled the 560 participants during the webinar to ask if they thought they might qualify for the employee retention credit, 54% said they wouldn’t but 46% indicated that they might qualify in one or more quarters, according to a slide during the presentation.

“There’s a lot of potential benefit here, and there’s going to be a lot of interaction in 2021,” Pittman said. “ … And we just have to dial in on those details to make sure we’re compliant but maximizing the benefit. We don’t want to leave anything on the table. We hate leaving money on the table.”

For more info, visit Pbmares.com/covid-19-resource-center.

Tara Bozick, 757-247-4741, tbozick@insidebiz.com