Important Planning Opportunity For Companies Eligible for both PPP Loans and the Employee Retention Credit

As we continue to work with companies regarding the various stimulus programs available as a result of the Consolidated Appropriations Act (CAA) signed on December 27th, 2020, we wanted to share a planning tip for companies that qualify for both PPP loans (round 1 or round 2) and the newly expanded Employee Retention Credit program (ERC).

The CAA made important changes to the Employee Retention Credit Program that expanded the availability of this credit to many companies that were not previously eligible under the CARES Act. If your business qualifies for both PPP and ERC (see attached flow charts to evaluate your eligibility), planning may help you maximize your benefits from the programs. The following are important to consider when executing your plan:

  • Timing of when to apply for and receive PPP funding.
  • Timing of wages paid in the PPP program covered period to ensure as many wages as possible remain eligible for the Employee Retention Credit.
  • Optimizing which eligible expenses to use when applying for PPP forgiveness.

Evaluate your company’s situation and should you determine that you are eligible for both programs, carefully consider how they interact with each other to maximize your benefit. We are available to consult with you on these programs should you need assistance. Please reach out to your contact at Harding Shymanski if you need assistance.

Employee Retention Credit 2020

Employee Retention Credit 2021

PPP Flowchart 2021

For additional information please contact Matt Folz mfolz@hsccpa.com, Scott Touro, stouro@hsccpa.com, Trudy Stock, tstock@hsccpa.com or Kyle Wininger, kwininger@hsccpa.com or by calling 812-464-9161.

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