The Employee Retention Tax Credit (ERTC) provision of the 2020 CARES Act was overshadowed by the PPP loan program, primarily because the original ERTC provisions prohibited an employer with a PPP loan from claiming ERTCs.
The 2021 Consolidated Appropriations Act, passed just weeks ago and most known for allowing businesses a tax deduction for the expenses paid with tax-free PPP funds, made sweeping changes to the ERTC rules as well. Most notably, lawmakers removed the provision disallowing businesses with PPP loans to participate in the ERTC program.
As a result, these valuable credits are now available to more business owners for wages paid in Q1 & Q2, 2021 (and possibly for wages paid in 2020). For more information about the original provisions of this program, see our article here.