The Employee Retention Credit (ERC) is excellent news for businesses. It is a fully refundable payroll tax credit, serving as a reimbursement for a portion of payroll taxes incurred. Unlike a deductible that reduces taxable income, the ERC directly reduces the total tax owed to the IRS. If you qualify, you can receive tax credits of up to $26,000 per employee from the IRS. Additionally, it is even possible to receive a cash payment from the IRS exceeding the amount you paid in payroll taxes. Submitting your ERC application presents an opportunity to maximize the benefit from every dollar spent on payroll in 2020 and 2021. We commend you for employing people during the pandemic, and this is a chance to leverage the credit you deserve.

ERC applications became available in early March 2020 with the implementation of the CARES Act. Initially, businesses were unable to participate in both the PPP loan and ERC program concurrently. However, as of March 2021, it is now possible to take advantage of both programs, provided they are managed correctly. The good news is that you still have time to claim your ERC funds. Since the ERC is a payroll tax credit, you will need to amend your previously filed 941 forms. Generally, you can amend a 941 form within three years from the original filing date. To ensure accuracy and avoid delays, it's advisable not to wait or guess. Begin your ERC application with the assistance of our expert team today.

2020: Up to $5,000 per W-2 employee. SMB’s are eligible to receive up to 50% of “qualified wages” (up to $10,000 per employee) paid out from March 13, 2020 through the end of 2020. 2021: Up to $21,000 in credits per W-2 employee. The government loosened things up for 2021 and increased the credit to 70% of “qualified wages”—up to $10,000 per employee, this time per quarter. (Q1-3) Note: Different rules apply if you qualify for “Recovery Startup” Tax Credit, if your business start date is after Feb 15, 2020 with less than $1 million in gross receipts. Must have paid W-2 employees. In total, you could potentially receive up to $26,000 in tax credits per W-2 employee payroll tax filings throughout all of 2020 and three quarters of 2021.

Determining your eligibility for the ERC does not involve any upfront charges or fees, and you will never have to pay out-of-pocket expenses. Our fee, once your credit is successfully processed with the IRS, is lower than that of our competitors, set at 25%. We only receive payment if you receive your ERC funds, and there are no hidden fees or additional obligations beyond that.

In order to apply for the ERC, you will be required to submit an amended payroll tax return for each qualifying quarter, using IRS Form 941-X. To accurately calculate the credit amount for your company, you will need the following documentation: Payroll reports. Gross receipts, which indicate the revenue collected per quarter in 2020 and 2021. Information regarding government orders that affected your business, including details of their impact. Documentation for any other grants, credits, or PPP loans you have received. Quarterly payroll tax filings. As part of the application process, ERC Credit's tax experts will assist you in correctly formatting and documenting this information. They will ensure that your application is complete and accurate.

Certain circumstances do not qualify for the ERC, including: Wages paid to majority owners (over 50%) and their spouses who have any living relatives. Wages paid to certain family members of majority business owners. Self-employed individuals with no W2 employees. Businesses, except for qualified startup businesses, that did not have to either partially or fully suspend their normal business operations due to a government or state-issued order. Businesses that did not otherwise qualify and did not experience at least a 50 percent decline in gross receipts in a quarter of 2020 compared to the same quarter in 2019. Businesses that did not otherwise qualify and did not experience at least a 20 percent decline in gross receipts in a quarter of 2021 when compared to the same quarter in 2019. State and local government employers and their instrumentalities.

Certainly! The Employee Retention Credit (ERC) is available to both essential and non-essential businesses. It's not solely based on a decline in revenue. Even businesses that experienced increases in sales can qualify for the ERC if they faced disruptions or negative impacts due to the pandemic. The eligibility criteria consider various factors beyond revenue decline, allowing a wider range of businesses to qualify for this valuable credit.