Business Entities and the Aggregate Rule

When considering how many questionnaires a business owner should be taking, business entities are separated by EINs according to the IRS. So when filling out ERC Specialists questionnaire, there should be a different questionnaire taken for each EIN. For majority owners, the aggregate rule may come into place. A majority owner is defined by an owner that owns more than 50% of the business. The IRS aggregate rule requires the majority business owner to combine the number of full-time employees of all companies that the business owner was a majority owner of during 2019 for this question.

Here is an example that may help below taken directly off of our official questionnaire: 

The business owner was the majority owner of ABC Company, which averaged 50 FT employees in 2019. The same business owner was also the majority owner of 123 Company, which averaged 75 FT employees in 2019. According to the aggregate rule, the employee count of both companies must be combined for the ERC program. Although both companies can be entered for the program, they would both be classified as over 100 employees.

There are two questions to be aware of on the questionnaire involving employee headcount and average. We will attach a screenshot of each question on this email for reference. The first question reads, "How many full-time employees did you average in 2019?." For this question, the business should only be providing the count of full-time employees and using the aggregate rule when applicable. When the questionnaire later asks "In 2020 (or 2021), how many W2 employees did you average?" this is where the business should only provide full-time employees from the business entity (EIN) they are taking the questionnaire for.

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