We Specialize in Maximizing the Employee Retention Credit for Businesses and Nonprofits.
Up to $26,000 per employee is available even to those who received PPP funds.
COVID-19 has been a challenge for businesses in almost every industry. 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
government stimulus program designed to bolster those businesses that were able to retain
their employees during this challenging time.
The ERC is a refundable payroll tax credit that can be as high as $5,000 per employee in 2020 and as high as $21,000 per employee in 2021. It was included in the CARES Act as part of the government’s response to the COVID-19 crisis.
Originally an employer could get a Payroll Protection Program Loan (PPP) or the ERC but not both. Most employers chose the PPP as it was more beneficial to them. However, the Act was amended in December 2020 to allow organizations that took the PPP loan to now apply for the ERC.
Employers that experienced partial shutdowns due to government orders limiting commerce, or supply chain disruptions, or who sustained significant declines in quarterly gross receipts (as compared to their quarterly gross receipts in 2019) due to the pandemic are eligible employers under this program,
No. This is not a loan. It’s a refundable tax credit.
Your tax accountant, whether a CPA or EA, will most likely only prepare your Federal and State Income Tax returns. However, ERC credits are claimed against Employment Taxes.
The complexity and scope of the ERC program is a formidable beast. The original 2020 CARES Act has been modified several times with the 2020 Taxpayer Certainty and Disaster Tax Relief Act and the 2021 American Rescue Plan. We have talked to many tax accountants who said they are focused on staying current with the ever-evolving Income Tax Code, but they cannot also become experts in the ERC program.
We have decades of payroll experience which has allowed us to specifically focus on understanding and maximizing the ERC program. In our experience we have found that due to the complexity (the ERC tax code is over 200 pages), the time investment necessary to understand these new laws and the laborious analysis of a company’s unique situation, very few CPA’s are able to effectively maximize this sizable credit for your organization.
With more than 43 years of forensic accounting experience, the tax professionals that review each ERC case are Enrolled Agents with the IRS and Certified Fraud Examiners having processed over 6000 cases for refunds of more than $1,000,000,000.
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 an employer to have a PPP loan and still take advantage of the ERC credit.
If eligible, employers can claim the ERC for qualified wages paid in 2020, as well as Q1, Q2 and Q3 of 2021.
Yes! There are three possible qualifications: revenue reduction, or a “full or partial shutdown of your business due to COVID-19” or supply chain disruption.
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 their operating hours because 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 amount of people who can attend due to COVID-19 restrictions.
No. This is not a lending program – tax refunds are issued by the US Treasury.
Refunds are released based on the IRS backlog. Currently, we are seeing a 6 months timeframe for refunds, however, the timeframe could get longer as more employers apply for the credit. The sooner you apply the sooner you get your refund.
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.
