Recovery Start-Up Employee Retention Credit

Bill Egan

Did you start a business in 2020 and think that you were unable to qualify for the amazing Employee Retention Credit?

Well, think again; you could be in luck. The recently enacted American Rescue Plan Act of 2021 (ARPA), created a new path that could allow you to qualify for up to $100,000 of employee retention credits in the third and fourth quarters of 2021 if you:

  • began business operations after February 15, 2020 and
  • have average annual gross receipts of $1 million or less,

When you meet the above requirements, you could qualify as a recovery start-up business and, as such, could be able to claim an employee retention credit of up to $50,000 in both the third and fourth quarters of 2021.

It works like this: your recovery start-up business employee retention credit 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.

There are other rules around existing businesses that have created a new trade or business and limitations on owners and sick leave credits and other applicable rules so it’s still complicated.  If you think you might qualify please reach out to us at and we can take a look at this opportunity.



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