Frequently Asked Questions
ERC is part of The Coronavirus Aid, Relief, and Economic Act which provides relief for qualified wages paid to retained employees. This is a government stimulus program designed to bolster those businesses that were able to retain their employees during challenging times faced by the Pandemic. Please include the section below under read more: (For the 2020 program, the ERC is equal to 50% of qualified wages (including allocable qualified health plan expenses) that eligible employers pay their employees. This applies to wages paid after 3/12/2020 and before 1/1/2021. The maximum amount of wages considered with respect to each employee for all calendar quarters is $10,000 and for the 2021 program, the credit is increased to 70%, and the limit is $10,000 per quarter. This means the annual maximum for an employee is $26,000. The tax credit offsets all withheld federal employment taxes including federal income tax withholding, Employer FICA and Medicare. Any excess credit will be refunded or advanced by the IRS.)
Qualified wages are compensation provided to employees during an eligible period. An eligible period is either:
a) The time during which the trade or business is fully or partially suspended by governmental order, or
b) For 2020, any calendar quarter during which gross receipts are 50% less than the amount received during the same quarter of 2019; for 2021, any calendar quarter during which gross receipt are 20% less than the same quarter of 2019
Yes, if they are familiar with payroll returns. The challenge is the ERC credit is taken on your payroll returns and not through your business income tax returns, which is what most CPA's handle. Because of this most CPA's do not process this credit, unless they process your payroll in house. This is also a big reason why this credit is so underutilized. Since CPA's don't typically handle it and they are the tax experts, it has mostly fallen in a middle ground where few are able to effectively process the credit. Interestingly, we receive a large portion of our clients from CPA's.
Any businesses impacted by the Pandemic which operated during 2020/2021 calendar years ordered to partially or fully suspended business by the government may be eligible for benefits up to $26,000 per employee.
Initial analysis to determine your eligibility and approximate credit is completely free. If you file for an ERC with us, our fee is a percentage of the credit to be received.
Similar to many other previous government programs, funds are limited on a first come, first served basis. Once the allocated funds have run out, your application may not be considered.
The process from start to finish usually takes 2-3 weeks. If you wish to move forward, you will select your desired payment option and we file your claim. Once filed, refunds are released based on IRS payment schedule.
ERC is not a loan, so there is no repayment or restrictions for what the funds can be used for.
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.
IRS Updates
Check out the most recent information.
New law extends COVID Tax Refund Credit for Employers who keep workers on Payroll
IR-2022-89, April 18, 2022 - The Department of the Treasury and the Internal Revenue Service have received requests from...
Employers may be able to Claim the Employee Retention Credit and have a PPP Loan
IR-2022-88, April 18, 2022 - Taxpayers requesting an extension will have until Monday, Oct. 17, 2022, to file a return.
An Eligible Employer can Claim the Employee Retention Credit ($26,000) for qualified wages
IR-2022-87, April 15, 2022 - Beginning in Mid-April 2022, the IRS will send CP2100 and CP2100A notices...
Advance Payment of Employer Credits Due to COVID-19
IR-2022-86, April 15, 2022 - The Internal Revenue Service is reminding taxpayers the deadline to file and pay tax owed for most...
R-2021-21, January 26, 2021 — The Internal Revenue Service urges employers to take advantage of the newly-extended employee retention credit, designed to make it easier for businesses that, despite challenges posed by COVID-19, choose to keep their employees on the payroll.
The Taxpayer Certainty and Disaster Tax Relief Act of 2020, enacted December 27, 2020, made a number of changes to the employee retention tax credits previously made available under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), including modifying and extending the Employee Retention Credit (ERC), for six months through June 30, 2021. Several of the changes apply only to 2021, while others apply to both 2020 and 2021.
As a result of the new legislation, eligible employers can now claim a refundable tax credit against the employer share of Social Security tax equal to 70% of the qualified wages they pay to employees after December 31, 2020, through June 30, 2021. Qualified wages are limited to $10,000 per employee per calendar quarter in 2021. Thus, the maximum ERC amount available is $7,000 per employee per calendar quarter, for a total of $14,000 in 2021.
Retroactive to the March 27, 2020, enactment of the CARES Act, the law now allows employers who received Paycheck Protection Program (PPP) loans to claim the ERC for qualified wages that are not treated as payroll costs in obtaining forgiveness of the PPP loan