Does Your Law Firm Qualify for the Employee Retention Credit (ERC)?

calendar iconSeptember 3, 2021

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It’s not too late for law firms to qualify for tax credits due to partial shutdowns or declines in gross receipts during 2020 and 2021. Law firms may qualify as an eligible employer for purposes of the credit if they had or were subject to government mandates by virtue of certain courts being closed during the period of 2020 and potentially into 2021. Law firms can file amended payroll tax returns to claim ERC benefits.

Listen to Jamie Walker, a leader in our Professional Services Industry practice and Martin Karamon, a Tax Services Principal and leader of Cherry Bekaert’s ERC Team as they give an update on the ERC, including Rev. Proc. 2021-33, issued by the Department of Treasury and the Internal Revenue Service, which provides a safe harbor that allows employers claiming the ERC to exclude forgiven Paycheck Protection Program (“PPP”) loans from the definition of gross receipts, solely for determining eligibility for the ERC, and how law firms qualify for the ERC.

Law firms have worked to document the fact that they were eligible employers tied to the mandates that were restricting access to the courts. And it’s not just court closures. Firms also should think about court restrictions, delays specific to trials where there was a prohibition on having in-person juries, as well as restrictions and/or disturbances changing the way that law firms could operate that were tied to government mandates specific to the way that the courts were allowing firms to address matters before the Court.

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