July 12, 2024

    PPP And ERC: Learn When You Can Use Both

    Each wave of the pandemic delivered crushing blows to businesses all across the country. From 2020 onwards, Covid-19 has been a consistent thorn in our sides. There are millions of fewer workers due to the pandemic, so keeping them has become more valuable than ever.

    If you’ve found yourself in a financial hole because of the pandemic, there may be PPP and ERC options to help you protect against the loss of employees.

    It’s not one or the other anymore, either. Read on to find out if you’re eligible to receive both.

    How Does ERC Apply?

    At the beginning of 2020, we had started to witness the devastating effects that Covid-19 would have on the economy. The government had to implement a way for businesses to ensure that their employees would continue to see their paychecks.

    The tool that was made available was the Employee Retention Credit. If you had taken a PPP loan around this time, you would have been right in assuming that you were exempt from being able to receive ERC.

    For everybody else, the rules were simple.

    On wages up to $10,000, you could receive 50% of those in credit. That applies to each EE every year.

    The sole qualifier was that you could no longer conduct business as usual because of the pandemic or if you suffered from badly harmed sales. A sufficient severity was a 50% reduction in sales.

    Can You Have PPP and ERC?

    Even though PPP is a forgivable loan and ERC was a government-issued credit, you could not receive both. As the pandemic continued longer than anybody expected, there needed to be a change.

    That change came at the beginning of 2021. The government enacted the Consolidated Appropriations Act. This act is what finally allowed businesses to receive ERC while still having a PPP loan!

    It wasn’t the only thing that changed, as they also lessened the requirements for receiving ERC.

    The New ERC Guidelines

    Eligibility for closed businesses remains the same with the new implementation of ERC. The old requirement of a 50% reduction in sales was changed to a 20% reduction, however.

    The change is retroactive, meaning that businesses may still be able to apply for credit on issues they had in the previous quarter.

    If you’re interested in finding out if you are eligible, consider contacting a specialist. We recommend it if you’ve also got a PPP loan, since that can make matters more complicated. Try contacting ERC Today for more details.

    Keep Your Business Finances Healthy

    Managing your finances and the protection of your employees can be difficult even without the strain of a pandemic bearing down on your business. A forgivable loan or government credit isn’t always available to help out, either.

    That’s where some good old-fashioned business tips and advice can come in handy, even if you did manage to receive PPP and ERC. You can get all of that right here on the blog.

    There’s regular coverage of business news that might give you just the suggestions you need, so keep reading!


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