Resources

Client Alerts, News Articles, Blog Posts, & Multimedia

Everything you need to know about BMD and the industry.

IRS Guidance on Employee Retention Credit

Client Alert
December 11, 2020

The Employee Retention Credit created under Section 2302 of the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act is a refundable tax credit against certain employment taxes equal to 50 percent of the qualified wages an eligible employer pays to employees after March 12, 2020, and before January 1, 2021. Since the adoption of the CARES Act, employers have expressed concern that if one employer acquires another employer that previously received a PPP loan, the acquirer’s entire aggregated group may no longer be eligible to claim the Employee Retention Credit.

On November 16, 2020, the IRS added two new FAQs to their website addressing this Employee Retention Credit issue. Initially, the only way an employer that received a CARES Act Loan (e.g., PPP) would be eligible for an employee retention credit is if they paid the loan back by May 18, 2020, regardless of whether the loan is subsequently forgiven or paid back after May 18, 2020.

However, an employer acquiring an entity may remain eligible for the Employee Retention Credit after the May 18th deadline if certain conditions are met. Take the following example to understand the conditions. Company A is the Acquiring Employer in the transaction, while Company B is the Target Employer who has received PPP funds. For Employee Retention Credit eligibility conditions to apply, Company A’s acquisition of Company B’s stock or other equity interest must result in Company B becoming a member of the Aggregated Employer Group under the aggregation rules. Now, for the Acquiring Employer to remain eligible for the Employee Retention Credit, prior to the closing date of the transaction, the Target Employer must have:

  • fully satisfied the PPP loan; or
  • submitted a forgiveness application to the PPP lender and established an interest-bearing escrow account.

If one of the conditions are met, the Aggregated Employer Group, after the closing date, will not be treated as having received a PPP loan, provided that the Acquiring Employer – including any member of the Acquiring Employer’s pre-transaction Aggregated Employer Group – had not received a PPP loan before the closing date and no member of the Aggregated Employer Group receives a PPP loan on or after the closing date.  If so, any employer that is a member of the Aggregated Employer Group, including the Target Employer, may claim the Employee Retention Credit for qualified wages paid on and after the closing date, provided that the Aggregated Employer Group otherwise meets the requirements to claim the Employee Retention Credit.  In addition, any Employee Retention Credit claimed by the Acquiring Employer’s pre-transaction Aggregated Employer Group for qualified wages paid before the closing date will not be subject to recapture under section 2301(l)(3) of the CARES Act.

If the Target Employer had received a PPP loan, but prior to the transaction closing date, the PPP Loan is not fully satisfied and no escrow account is established, then, after the closing date, the Aggregated Employer Group (other than the Target Employer) will not be treated as having received a PPP loan, provided that the Acquiring Employer (including any member of the Acquiring Employer’s pre-transaction Aggregated Employer Group) had not received a PPP loan before the closing date and no member of the Aggregated Employer Group receives a PPP loan on or after the closing date. 

Any employer (other than the Target Employer) that is a member of the Aggregated Employer Group may claim the Employee Retention Credit for qualified wages paid on and after the closing date, provided that the Aggregated Employer Group otherwise meets the requirements to claim the Employee Retention Credit.  In addition, any Employee Retention Credit claimed by the Acquiring Employer’s pre-transaction Aggregated Employer Group for qualified wages paid before the closing date will not be subject to recapture under section 2301(l)(3) of the CARES Act. 

However, the Target Employer that received the PPP loan prior to the transaction closing date and that continues to be obligated on the PPP loan after the closing date is ineligible for the Employee Retention Credit for any wages paid to any employee of the Target Employer before or after the closing date.

To find out if you are eligible for the Employee Retention Credit due May 18th, contact the PPP Loan/SBA Loan BMD Practice Group Christopher Meager at cmeager@bmdllc.com.

Christopher Meagerkrista warrenEmployment LawIRSGuidance on CARES Act
Client Alert

First-of-Its-Kind Federal Ruling Finds Use of Consumer AI Tool May Destroy Attorney-Client Privilege

February 17, 2026On February 10, 2026, Judge Jed Rakoff of the U.S. District Court for the Southern District of New York issued a first-of-its-kind ruling finding that documents generated by a criminal defendant using a consumer AI platform were not protected by attorney-client privilege after being shared with counsel. The court treated the AI tool as a third party, concluding that entering sensitive information into a publicly available platform may waive confidentiality. The ruling also suggests that the work product doctrine may not apply where AI-generated materials are created independently by a client rather than at counsel’s direction. The decision signals that parties should exercise caution when using consumer AI tools in connection with legal matters.Client Alert

Your Golden Chance for H-1B Lottery Registration - March 2026

February 16, 2026USCIS H-1B registration opens March 4–19, 2026. U.S.-based employees on valid nonimmigrant status are exempt from the $100,000 fee for change of status petitions. The new weighted lottery favors higher-skilled and higher-paid employees, improving odds for advanced degree holders and Wage Level 3 or 4 workers.Client Alert

Invisible Algorithms: The Hidden Role of Artificial Intelligence in USCIS Immigration Processing

February 10, 2026The Department of Homeland Security has confirmed that artificial intelligence and machine learning tools are now integrated into numerous operational functions within U.S. Citizenship and Immigration Services (USCIS). These tools are described as mechanisms to improve efficiency, reduce backlogs, and assist officers in managing an unprecedented volume of applications. DHS emphasizes that human adjudicators retain decision-making authority and that AI systems do not independently grant or deny immigration benefits. Find out how AI affects the U.S. immigration process.Client Alert

OAAPN | Year In Review: 2026 Ohio Board of Nursing and Ohio Law Rules

February 9, 2026Find out key changes to Ohio law and the Ohio Board of Nursing rules that have directly impacted APRN practice over the past year, including Psychiatric Inpatient Documents, Intimate Examinations, Signature Authority, Duties Related to Fetal Death, Retail IV Therapy Clinics, Release from Permanent Restrictions, Disciplinary Action, Course on Drugs and Prescriptive Authority, Overdose Reversal Drugs, Office Based Opioid Treatment, Withdrawal Management for Substance Use Disorder, Safe Haven Program, and more.Client Alert

Ohio House Bill 537: Proposed Regulations for Midwives and Birthing Centers

January 28, 2026House Bill 537, introduced in the Ohio House of Representatives, proposes a comprehensive regulatory framework for certified nurse-midwives, certified midwives, licensed midwives, and traditional midwives. The legislation would clarify scope of practice, establish licensure standards, and impose new requirements for freestanding birthing centers and home births. Healthcare providers and facilities should be aware of the proposed changes and their potential operational impact.
Older posts