Alternate Quarter for ERC calculation

Technical topics regarding tax preparation.
#1
IDCPA  
Posts:
1104
Joined:
22-Aug-2014 11:22am
Location:
Idaho
Sorry for a new, related topic, but this one has a different question/concern. I only have 3 clients who qualify for the ERC, and 1 of them qualified for Q1 2021 based on what I used as the alternate method of comparing Q1 2021 to Q4 2020 (which I now think is an incorrect determination, but I'm really hoping I'm wrong now/was right when I made the determination)

As I've taken a deeper dive for purposes of the question in my other thread, I think it's been made clear the alternate method for Q1 2021 should compare Q4 2020 to Q4 2019.

In the case of this client we have applied for a refund of $7,000 based on the comparing 1-2021 to 4-2020. But neither their 1-2021 vs 1-2019 comparison, nor their 4-2020 vs 4-2019 comparisons yield a 20% decline in gross receipts. And thus, I don't think they qualify for Q1 2021 :(.

If I'm wrong, I'm not wrong alone. Here is the Gusto calculator that was sent out on July 2nd. Note the "Alternate Period" calculator uses (for Q1 2021) Q1 2021 vs Q4 2020.... just as I did.... but I still now think I'm wrong and Gusto is wrong. But I'm hoping someone can confirm or correct my current understanding. Preferably the latter.

https://docs.google.com/spreadsheets/d/1lD_vTWf6jdVWQluRfbLuQm67Fc-cBI4WhjmBFYfO8EA/edit#gid=0
 

#2
Posts:
260
Joined:
20-Sep-2020 2:59pm
Location:
US
My understanding is that you would compare q4 of 20 to q4 of 19
 

#3
IDCPA  
Posts:
1104
Joined:
22-Aug-2014 11:22am
Location:
Idaho
I don't like your understanding but I agree. Somewhere back in the day I had a different interpretation. That Gusto spreadsheet would suggest I'm not alone.... and it's pretty recent, earlier this month.
 


Return to Taxation



Who is online

Users browsing this forum: 808CPA808 and 99 guests