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The banking business has experienced a definite transition over the past few years as consumers shift to digital tools that provide them with the convenience they prefer. Fintech is no longer a new concept — nearly 44 percent of Americans utilize mobile banking, and 27 percent use an online-only bank.

The COVID-19 pandemic hastened the move to mobile banking, resulting in branch closures and a decline in profits of approximately 10-2 percent due to a surge in loan defaults, lower interest rates and increased regulatory and cybersecurity burdens. Some banks reported a staggering escalation in cyberattacks and fraud attempts — up almost 200 percent — during the pandemic.

Although they handle money daily, these institutions might not be aware of funds available to eligible businesses through the Employee Retention Credit (ERC). The ERC is a payroll tax credit introduced through the Coronavirus Aid, Relief and Economic Security Act (CARES Act) to encourage businesses to keep their employees on the payroll during the pandemic.

How much of a refund can eligible banking employers receive through the Employee Retention Credit? For 2020, the ERC is a credit against certain payroll taxes of 50 percent of the wages paid — up to $10k per employee — from March 12 – December 31, 2020 (capped at $5k per employee). For 2021, the ERC is a quarterly tax credit of 70 percent of the first $10,000 in wages per employee in each quarter of 2021 from January to September 2021 (capped at $7K per employee per quarter).

Government Orders

Example: California, March 19, 2020 –
California Governor Gavin Newsom issued Executive Order N-33-20 (the “Order”), which was effective immediately and until further notice. The Order requires all residents to stay home, except as needed to maintain continuity of operations of “Essential Critical Infrastructure” sectors and additional sectors as the State Public Health Officer may designate. Essential Critical Infrastructure are identified in the U.S. Department of Homeland Security Cybersecurity & Infrastructure Security Agency (“CISA”)’s “Memorandum on Identification of Essential Critical Infrastructure Workers During COVID-19 Response,” dated March 19, 2020 (the “Memorandum”). The Memorandum defined Critical Infrastructure Workers as persons who conduct a range of operations and services that are essential to continued critical infrastructure viability, such as healthcare, telecommunications, information technology systems, defense, food and agriculture, transportation and logistics, energy, water and wastewater, law enforcement, and public works. The State Public Health Officer also issued a list of “Essential Critical Infrastructure Workers” that are allowed to leave their residences to travel to and from work.

Find More Government Orders Specific to Your State on Our Insights Page

Don’t default to taking the easy way out and missing out on available funds. Check out these FAQs that provide an overview of the Employee Retention Credit:

How Can Banking Businesses Benefit From the ERC?

As an employer in the banking industry, you know that better customer service results in more satisfied consumers. Investing ERC funds into staff training and development means a more skilled workforce and improved operational efficiency, all of which can contribute to business growth. Or, you can put the money toward new technologies that improve service efficiency, such as a better online banking platform, advanced data analysis tools or other fintech solutions. The choice is up to you!

For How Long Is the Employee Retention Credit Available?

Time is money, and the ERC program won’t be available for long. The Employee Tax Credit technically expired in September 2021, but eligible banking businesses still have time to file paperwork and retroactively receive claims for the ERC in 2023. To do so, they must file a Form 941-X for relevant quarters. For all four quarters in 2020, the deadline to apply is April 15, 2024. For all quarters in 2021, the deadline is April 15, 2025.

How Do I Know if My Banking Business is Eligible for the Employee Retention Credit?

You may be eligible for the ERC if your business operations were fully or partially suspended by governmental COVID-19 orders, thereby limiting commerce, travel or group meetings. Your business also might be eligible if it experienced a significant decline in gross receipts during 2020 or within the first three quarters of 2021. New startup businesses that began operations after February 15, 2020, may also qualify, regardless of revenue.

There are two main ways to be eligible for stimulus refunds:

  • If your business matches the required decline in revenue within any quarter of 2020 or 2021.
  • If you have W-2 employees.
What Exactly Is “a Significant Decline in Gross Receipts” Under the Employee Retention Credit Program?

The answer to this question varies from 2020 to 2021. A banking employer had a significant decline in gross receipts in 2020 during the first calendar quarter if its gross receipts for that quarter were less than 50 percent of those for the same calendar quarter in 2019. An employer had a significant decline in gross receipts in 2021 during the first calendar quarter for its gross receipts for that quarter if they were less than 80 percent of those for the same calendar quarter in 2019.

How Do I Apply for the Employee Retention Credit?

 Businesses in the banking industry must first determine their eligibility, starting by ensuring they meet IRS qualifications. To retroactively claim the ERC, amend previously submitted Forms 941 by filing and submitting Form 941-X for each qualifying quarter.

Banking businesses might have expertise in finance, but most aren’t up-to-date on how to procure maximum tax credits. The talented team at StenTam is available to answer your questions and provide guidance to ensure you claim the ERC correctly before the deadline. Reach out to us today to learn more!

Qualifying orders (From IRS)

What kind of government orders qualify my business or organization for the ERC? (added July 28, 2023)

To qualify for ERC, you need to have been subject to a qualifying government order related to COVID-19 that caused a full or partial suspension of your trade or business operations. The government order may be at the local, state, or federal level.

Examples of governmental orders:

  • An order from the city’s mayor stating that all non-essential businesses must close for a specified time period;
  • A state’s emergency proclamation that residents must shelter in place for a specified period, except for essential workers;
  • An order from a local official imposing a curfew on residents that impacts the operating hours of your trade or business for a specified time period;
  • An order from a local health department mandating a workplace closure for cleaning and disinfecting.
Can I rely on a recommendation, bulletin or statement issued by a government authority to qualify for ERC? (added July 28, 2023)

No. To qualify for the ERC, you must have been subject to a government order that fully or partially suspended your trade or business.
Recommendations or statements encouraging you to take certain actions are not orders.
If you use a third party to calculate or claim your ERC, you should ask them to give you a copy of the government orders – not a generic narrative about an order. Read the order carefully and make sure it applied to your business or organization.

Is being subject to a government order enough to make me eligible for ERC? (added July 28, 2023)

No. You need to demonstrate that the government order was related to COVID-19 and that it resulted in your trade or business being fully or partially suspended.

What does it mean to be fully or partially suspended? (added July 28, 2023)

Whether your business or organization was fully or partially suspended depends on your specific situation. For examples, see Notice 2021-20, Part III, Section D.

Some examples of who doesn’t qualify under this eligibility factor:

  • If all your employees were able to telework during the pandemic and your business continued to operate, your business wasn’t suspended.
  • If your customers were affected by a stay-at-home order, but no orders applied to your business operations, you weren’t suspended.
  • If you voluntarily closed your business or reduced hours of operation, you weren’t ordered to suspend.

You could still qualify for ERC based on a decline in gross receipts even if you don’t qualify under suspension of operations due to government order.

Was my business or organization fully or partially suspended if I had a supply chain issue? (added July 28, 2023)

A supply chain issue, by itself, does not qualify you for the ERC.

The IRS provided a narrow, limited exception if an employer was not fully or partially suspended but their supplier was. However, it applied only when the employer absolutely could not operate without the supplier’s product and the supplier was fully or partially suspended themselves.

In addition to having the supplier’s governmental order, you will need to show that:

  • The government order caused the supplier to suspend operations,
  • You couldn’t obtain the supplier’s goods or materials elsewhere (regardless of cost), and
  • It caused a full or partial suspension of your business operations.

Why Work With StenTam?

Accounting For All Your Specialty Tax Service Needs

Making money isn’t all there is to the banking business. Expertly managing assets, reliably forecasting risk management and maintaining complete regulatory compliance all are essential for financial sustainability.

At StenTam, we’ll help you make the most of tax credits and incentives for which you qualify so you can capitalize on your capital.


Secure Technology

Our proprietary software enables you to securely transfer information to our team with every transaction.



Never skipping a beat: working with our team means that every filing gets executed with a focus on compliance.

Risk-Free Filing

Each claim receives the appropriate documentation and audit ready file. StenTam is your long-term solution, and will help you defend your claim should there be an inspection.

Client Case Study

Zimmerman’s Automotive Services

Small, family-owned businesses were strongly impacted by the pandemic and the accompanying government-mandated shutdowns. A Pennsylvania-based automotive service provider struggled as these shutdowns made it more difficult to keep their...

Read More
Zimmerman’s Automotive Services

Zimmerman’s Automotive Services

Small, family-owned businesses were strongly impacted by the pandemic and the accompanying government-mandated shutdowns. A Pennsylvania-based automotive service provider struggled as these shutdowns made it more difficult to keep their...

Read More
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