How Does the ERTC Apply to Startup Companies?

September 4, 2023
Dayes Law Firm

It’s not just long-established businesses that can take advantage of the Employee Retention Tax Credit (ERTC/ERC) program. The ERTC is also available to startup companies, and startups even have slightly more time to take under consideration when doing a lookback at past eligible quarters for qualified wages. 

The ERTC applies to startup companies just like it does to businesses that were around long before 2020, when the tax credit was first established. 

How the ERTC Applies to Startup Companies

There are specific guidelines when it comes to applying for the Employee Retention Tax Credit as a “Recovery Startup Business.” Although the tax credit was originally available for wages paid from March 13, 2020, to December 31, 2020, new legislation later extended the coverage period to include wages paid through December 31, 2021.

But the Infrastructure Investment and Jobs Act retroactively ended the Employee Retention Tax Credit as of September 30, 2021, for most businesses. However, Recovery Startup Businesses are still eligible through December 2021.

Recovery Startup Business Qualifications 

To qualify as a Recovery Startup Business, your company must have started operations after February 15, 2020. The annual gross receipts of your business also must not exceed $1 million for the 2020 and 2021 tax years, and you have to have one or more W2 employees that don’t include owner-operators or family members.

Recovery Startup Business can potentially receive a credit of $7,000 per staff member, per quarter. They are limited to a $50,000 credit per calendar quarter, according to the IRS

The ERTC can help alleviate some of the challenges faced by small business owners trying to navigate the economic impact of COVID-19. This burden may be especially felt by business owners who started businesses during the first months of the pandemic, making the ability for Recovery Startup businesses to benefit from this program so important. 

The funds your business could receive thanks to the Employee Retention Tax Credit could make it possible to not only retain talent but also to hire new employees. This is especially important for startup companies looking to grow their business and expand their influence. 

The ERTC applies to startup companies as much as it applies to more established ventures but has the potential to make even more of a difference to those who lead or work for startups. Starting a business is always difficult, but starting one during the coronavirus pandemic was especially challenging, and the ERTC can reward startup business owners who weathered that difficult period and worked hard to keep their staff employed through it. 

Getting ERTC Assistance for a Startup Company 

The experienced team at Dayes Law Firm can help your company establish its eligibility for the ERTC as a Recovery Startup Business. To date, our firm has assisted businesses in filing for over $250 million in Employee Retention Tax Credit claims and our clients have already received over $25 million in funds from the ERTC program. 

Please give us a call or fill out the form on this page to see how we can help you and your startup company with the ERTC. We can discuss your case in a free, no-obligation consultation and determine how best to move forward to improve your ERTC refund.

Contact us today to see why so many startup companies have already turned to Dayes Law Firm for assistance with the ERTC!