Can I Get Both The PPP Loan and The ERC?

 PPP loan and ERC are different tax relief provisions under the CARES Act. Both of these loans provide an opportunity for small business owners to avoid permanent closers. 

An employer can benefit from these loans once they have qualified under the imposed condition to apply for these loans. 

Both of the loans were mainly targeted to help the small business owners, so sometimes employers wonder whether they can get the benefits of both loans. If you wonder about it too, the answer lies under section 206 of the Taxpayer Certainty and Disaster Tax Relief Act of 2020.

What Does The Taxpayer Certainty And Disaster Tax Relief Act Say?

Under the law, an employer eligible for the ERC can claim the credit, even if the employer already has received a Small Business Interruption Loan under the PPP. 

But there is a condition that all the employer looking to claim both of the loans needs to understand, and that is- 

• The eligible employer can only claim the ERC or any qualified wages that have not been counted as the payroll costs while obtaining the PPP loan forgiveness. 

Wages that could decide eligibility for the ERC or PPP loan forgiveness can be possibly applied to either of these two tax reliefs, not both. So, employers need to ensure that they do not try to apply for these loans on the same wages. 

Any employer who makes a fraudster attempt to get both loans on the same wages is subjected to legal actions. However, if an employer wants to apply for the PPP and ERC loan under the defined regulation of The Taxpayer Certainty And Disaster Tax Relief Act, they can consult the PPP loan consulting agency. And, when it comes to consulting, ERC Specialists are second to none. 

Know More About The ERC

Before applying for the ERC and PPP, it is important to know. And what are the benefits that both tax breaks have to offer you?

Employee Retention Credit (ERC)

ERC is a non-refundable credit. All eligible employers can retain up to $10,000 concerning each employee. The tax happens only according to the qualified wages paid during the first calendar quarter of 2020 and the first quarter of 2021.  

To know details and ERC guidance, employers can check the IRS website.

Paycheck Protection Program (PPP)

 

PPP loan is an incentive for small businesses to keep their workers on the payroll. It offers two draws, in which of the first draw of PPP loan can be used to fund they payroll costs like mortgage internet, rent, utilities, worker safety costs related to COVID-19, uninsured property damage such as looting and vandalism during the calendar year of 2020 and also the supplier costs and expenses that are used to run operations. 

Eligibility Of The PPP Loan

• The small businesses have their branches in multiple locations, and there are not more than 500 employees each. Then these Small Businesses are eligible for the first draw of the PPP loan. 

• Small businesses operating in multiple locations but do not have more than 300 employees per location are eligible for a second draw of the PPP loan. 

Read Also: What Is an Employee Retention Program?

So, after clarifying eligibility criteria, any employer can apply for the ERC and the PPP loan. If you want to profit from the benefit of the PPP and ERC loan, ERC Specialists can help you avail of the benefits.