Want an extra $100,000? Read on…

You likely already know that the employee retention credit (ERC) is a good deal — if you qualify.

Now, thanks to the recently enacted American Rescue Plan Act of 2021 (ARPA), you can qualify for up to $100,000 of ERC in the third and fourth quarters of 2021 if you…

• begin the business after February 15, 2020 (you could start today),
• have average annual gross receipts of $1 million or less, and
• do not meet either of the ERC tests — the suspended operations test or the gross receipts test — in place before ARPA was passed.

When you meet the three requirements above, you qualify as a recovery start-up business and, as such, can claim an ERC of up to $50,000 in both the third and fourth quarters of 2021.

It works like this: your recovery start-up business ERC is equal to 70 percent of the qualified wages paid to each employee (up to $10,000 per employee per quarter), with an overall maximum credit of $50,000 per quarter.

The big deal with the two quarters of 2021 is that your business has to be new, but it does not have to suffer from COVID-19 stresses. In fact, it can’t qualify for the recovery start-up business special deal if it otherwise qualifies under the suspended operations test or the gross receipts test.

Talk to your professional advisor about utilizing this strategy to boost your net worth — it may just work perfectly.

R. Kenner French is the author of two books — with another due out in August, an executive at VastSolutionsGroup.com, and is a frequent keynote speaker on tax and investing concepts.