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The Employee Retention Credit

ERC Funding can be complicated
We specialize in Maximizing ERC Funding for Small Businesses

COVID-19 has been a challenge for all of us. As the world shut down the economy came to a halt, leaving the future of many businesses in a precarious position. As we begin to find normalcy again, businesses now have to focus on recovering and fortunately, several government programs are easing this process.

One such program is the Employee Retention Credit or ERC, which is a generous stimulus program designed
to bolster those businesses that were able to retain their employees during this challenging time. Due to the extremely complex tax code and qualifications, it is severely underutilized. Details of the program include:

  • UP TO $26,000 PER EMPLOYEE

  • AVAILABLE FOR 2020 &
    Q1 - Q3 2021

  • QUALIFY WITH DECREASED REVENUE
    OR COVID EVENT

  • NO LIMIT ON FUNDING (ERC IS NOT A LOAN)

  • ERC IS A REFUNDABLE
    TAX CREDIT

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ERC Qualifications

While the general qualifications for the ERC program seem simple, the interpretation of each qualification is very complex. Our significant experience allows us to ensure we maximize any qualifications that may be available to your company.

             FULL OR PARTIAL SUSPENSION OF BUSINESS OPERATIONS

 

A government authority required a partial or full shutdown of your business during 2020 or 2021. This includes your operations being limited by commerce, inability to travel, or restrictions of group meetings.

 

             GROSS RECEIPTS REDUCTION

 

Gross receipt reduction criteria are different for 2020 and 2021 but are measured against the current quarter
as compared to 2019 pre-COVID amounts.

Your ERC Tax Refund

ERC Qualifications
While the general qualifications for the ERC program seem simple, the interpretation of each qualification is very complex. Our significant experience allows us to ensure we maximize any qualifications that may be available to your company.

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  • Do I have to repay the ERC Credit?
    No. This is not a loan. It's a refundable tax credit. When we file your ERC claim we request a refund check for you.
  • Can I get ERC Funds if I already took the PPP?
    Yes. The Taxpayer Certainty and Disaster Tax Relief Act of 2020, enacted December 27, 2020, modified the ERC credit rules. One of the modifications included allowing a company to have a PPP loan and still take advantage of the ERC credit. However, you can't use the same dollar for dollar funds. We take this into account when processing your ERC credit.
  • My revenue went up in 2020, can I still qualify for the ERC program?
    Yes! There are two possible qualifications for 2020: revenue reduction, or a "full or partial shutdown of your business due to COVID-19". Specifically, the IRS describes this as "A government authority required partial or full shutdown of your business during 2020 or 2021. This includes your operations being limited by commerce, inability to travel, or restrictions of group meetings." Below are several examples of qualifying events: Example 1: A restaurant must close or limit its on-site dining. Such as having to close down every other table, due to COVID-19 restrictions. Example 2: A business that needs to meet with clients in person and has to cancel meetings due to COVID-19 restrictions. Example 3: A business has to reduce its operating hours because of COVID-19 restrictions and cleaning requirements. Example 4: A business had delayed production timelines caused by supply chain disruptions. Example 5: A business with a planned event has to cancel that event, or restrict the number of people who can attend due to COVID-19 restrictions.
  • Will the ERC funds run out?
    This is not a lending program - tax refunds are issued by the US Treasury. Therefore, all eligible employers will receive the funds.
  • I'm getting more in ERC Credit than I paid in taxes.
    Remember that this program is taken according to payroll taxes paid, not on income taxes. ERC funds not applied towards owed payroll taxes are treated as an 'over-deposit' of taxes that will be requested as a refund check from the IRS.
  • As an owner do my wages, or the wages of any family member I employ qualify?
    Maybe. Wages of owners who have majority ownership, defined as over 50%, do not qualify, nor do the W2 wages of any immediate family members of the owner. In the case an owner has less than 50% ownership, their W2 wages qualify, as do the W2 wages paid to immediate family members.
  • How long does it take to get my ERC Credit?
    Once filed, refunds are released based on IRS backlog. Currently, the IRS has stipulated a 20 week minimum turnaround on the ERC refunds
  • Is the ERC Credit taxable?
    The ERC credit is not considered income for federal income tax purposes, but you must reduce any deductible wage expenses by the amount of the credit. Please provide the credit information to your CPA for tax purposes.
  • Do I have to repay the ERC Credit?
    No. This is not a loan. It's a refundable tax credit. When we file your ERC claim we request a refund check for you.
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