Time to Take a Second Look at Your COVID Relief Eligibility
Since President Biden signed the $1.9 trillion American Rescue Plan Act (ARPA) in March, businesses have been using emergency funds to help keep payrolls active and employees working. However, some businesses might be misjudging their eligibility for the relief package, especially the Employee Retention Credit (ERTC) which is the main program.
For example, the money is primarily available to companies with 500 or fewer W-2 employees. But for what year? According to the law, companies are eligible for COVID-19 relief funds if they have this number of employees working 30 hours or more in 2019 – not 2020 or 2021 as many company leaders mistakenly thought. And they might qualify even if their business grew during the pandemic, giving them access to up to $33,000 per employee, as described in the example below:
|Company||Number of full-time W-2 employees||Dollar value per employee||Total refund/credit amount||Amount of time to get refund from IRS — as of now|
|Example company XYZ||150||$33,000.00||$4,950,000||14-18 weeks|
*The number of refund/credits may vary depending on the “qualified wages.” Most companies with 500 or fewer employees have been receiving between $19,000 – $33,000 per full-time, W2 employee.
Intertek Alchemy is working with Economic Incentives Advisory Group (EIAG), a national credit, grants and incentives firm, to help simplify applications for the American Rescue Plan.
With their help, we’ve discovered specific language written into the law that benefits the manufacturing and food processing industries.
Because manufacturing and food processing are considered essential businesses, many of our clients are eligible to obtain federal funds. But they might be missing their opportunity because of confusion over guidelines and eligibility.
Many companies are being told they do not qualify because revenue remained the same or improved during the pandemic. Yet, there are other tests that can be passed to qualify, such as modifications made to the food processing line or implementing additional sanitary measures between shifts. Guidelines continue to change almost monthly, and to the advantage of Intertek Alchemy’s clients.
New changes to the recent stimulus package also allow businesses that received Paycheck Protection Program (PPP) loans to also receive the Employee Retention Credit (ERC). Employers can use the ERC towards wages not paid with the forgiven PPP proceeds. The government allows them to interplay, and if calculated properly can fully utilize the entire benefit of the ERC along with the PPP funds.
The updated guidelines also allow businesses to factor in healthcare benefits as part of the overall calculation. This means there are more “qualified wages” that can be included, which will increase the dollar amount per employee often adding $6,000 – $8,000 in qualified wages per employee annually by factoring in healthcare.
“The federal funds available through the American Rescue Plan are different and more substantial that I have seen in my 22-year history of managing government incentives,” said, Bryant Colman, Managing Principal of EIAG. “In most cases, these funds are available because employers retained employees during part or all through all the pandemic including this year. However, many food manufacturers are being told they do not qualify because business has improved for many. This myth they do not qualify simply is not true.”
Any company is free to apply for these relief funds on their own. But EIAG is available to help clients navigate the fast-changing government rules and other nuances to qualify and obtain these government dollars. EIAG services are performed on a no-risk basis. They do not charge up-front fees or retainers to perform their services of securing credits and incentives on behalf of the client. Instead, they collect a small percentage of the awarded funds.
Contact us to learn more about the American Rescue Plan Act and find out if your business qualifies for these funds.