What Is The ERC
The Employee Retention Credit (ERC) was authorized under the CARES Act and encourages businesses to keep employees on the payroll.
Get Up To $5,000 Per Employee
The 2020 ERC Program is a refundable tax credit of 50% of up to $10,000 in wages paid per employee from 3/12/20-12/31/20 by an eligible employer. THAT'S UP TO $5,000 PER EMPLOYEE!
Get Up To $21,000 Per Employee
The 2021 ERC Program has increased to 70% of up to $10,000 in wages paid per employee per quarter for the first 3 quarters of 2021. THAT'S UP TO $21,000 PER EMPLOYEE!
Don't Leave Money On The Table
Paid Out W-2 Wages?
Must have paid out wages to W-2 employees during 2020 and 2021 qualify
Get Cash From IRS
Called a “tax credit” but can be received as a cash payment from the IRS/US Treasury
No Limits
There is no dollar limit on the amount a business can receive; there are no requirements on how the money must be spent
Paycheck Protection Program Recipients Are Now Eligible
Businesses that once picked between the Paycheck Protection Program (PPP) and ERC can now likely qualify for both stimulus programs by amending their quarterly Form(s) 941 payroll returns.
Six Myths Surrounding The 2021 Employee Retention Tax Credit
Businesses around the country have been slow to evaluate, or quick to assume they are ineligible for, the 2021 Employee Retention Credit (“ERC”). The result: a significant amount of cash is still being paid to the Federal government when it could remain with companies that need it.
In 2021 the maximum amount of ERC is $7,000 per employee, per quarter. Therefore, if a company can identify $10,000 of qualified wages from each employee in the first and second quarter in 2021, they are looking at a maximum ERC of $14,000 per employee. This means that a 10-person business could get a maximum ERC of $140,000 and a 300-person company could generate a $4,200,000 ERC. You get the idea. Big dollars are available for this credit and businesses are missing the opportunity due to lack of understanding, or possibly just COVID burn out.
It is time to bust the myths surrounding the 20201 ERC and highlight the most common misunderstandings.
Frequently Asked Questions
What other impacts could qualify your business or organization?
- Full shutdowns
- Partial shutdowns
- Interrupted operations
- Supply chain interruptions
- Inability to access equipment
- Limited capacity to operate
- Inability to work with your vendors
- Reduction in services or goods offered to your customers
- Cut down in your hours of operation
- Shifting hours to increase sanitation of your facility
- And more, The ERC has gone through significant updates.
Can ERTC be Combined with PPP and/or SMOG?
Yes, this credit can be claimed alongside other relief options, including Paycheck Protection Program (PPP) and the Shuttered Venue Operators Grant (SVOG). Our team of experts will work with you to identify what expenses should be allocated across these programs to ensure you maximize the amount of relief your organization receives.
Am I Eligible if I Work with a Professional Employer Organization (PEO)?
Yes, you are still eligible for the Employee Retention Credit even if they work with a PEO. Our specialists are familiar with this staffing structure and can help guide you through the nuances.
What other impacts could qualify your business or organization?
- All size businesses
- Tax-exempt employers under section 501(c) and tribal entities qualify.
Is ERTC retroactive?
Yes, it is retroactive to March 27, 2020.
How Much Can I Expect from the Employee Retention Credit?
- Provide the biggest subsidiaries for middle-income and lower-income workers.
- Eligible employers immediately see a positive cash flow impact.
- Small employers benefit almost double compared to large employers.
(Small is less than 500employees full-time in 2019).
- May request an advance refund, and
- May potentially take full credit for workers’ wages.
- Employers can aggregate their businesses to qualify – they can be in different jurisdictions.
- Nonprofits have seen credits five times larger than the benefit of PPP loan.
- Start-ups (new trade or business) before DEC 31, 2021, may also claim ERTC.