Last month, we wrote that passage of the Consolidated Appropriations Act in December clarified that some businesses seeking pandemic relief assistance would be eligible to apply for benefits under both the Paycheck Protection Program (PPP) and the employee retention credit (ERC). This marked a break from common sentiment since it was widely assumed throughout 2020 that businesses had to choose which program to participate in. As a result, the CAA also allowed businesses that did NOT claim the ERC in 2020 to do so retroactively.
On March 1, the IRS released Notice 2021-20, offering a further level of detail, which businesses should welcome to determine how to maximize the benefits offered by both programs. CBM’s interpretation of the new notice is:
If your business is in the process of applying for PPP loan forgiveness, CBM’s advisors recommend pausing to evaluate eligibility for the ERC. Accurately reporting payroll costs on the forgiveness application is critical to borrowers who are also eligible for the ERC. Our team is available to assist borrowers with PPP forgiveness applications, PPP and ERC interaction, and advise on all aspects of both programs.
Please contact Richard Morris with any questions via our online contact form.