About us and frequently asked questions
The ERC Explained
The ERC Center provides a service directly to business owners to apply for the ERC tax credit. Our team of professionals will review all applicable documents to ensure compliance and see how you may qualify. The ERC Center can help your business receive a refund of up to $26,000 per employee to spend on hiring and retaining employees, operating expenses, paying off debt or growing your business!
The Employee Retention Credit (ERC) was developed to encourage and support employers who retained existing employees during 2020 and for the first three quarters of 2021 by offering a generous payroll tax refund through the IRS.
Eligible businesses can receive a refund of up to $5,000 per employee for all of 2020 and up to $7,000 per employee on payroll for each quarter of the first through third quarters of 2021. That’s a total reimbursement of up to $26,000 per employee on payroll .
HELP WITH EMPLOYEE RETENTION CREDIT
The ERC tax credit is a grant that Congress sanctioned for businesses that were affected by the COVID-19 outbreak. Initially, the ERC was not applicable to numerous businesses. However, with the implementation of new regulations, many businesses that suffered from COVID-19’s impact are eligible to receive significant relief funds, amounting to tens or even hundreds of thousands of dollars, in addition to any Paycheck Protection Program (PPP) or Economic Injury Disaster (EIDL) loans they may have already received. This presents a significant opportunity for businesses to recoup losses incurred as a result of the pandemic.
What Does the ERC Tax Credit Mean for Your Business?
The ERC is what’s known as a “refundable” tax credit calculated based on the
wages you paid employees. It’s called a tax credit, but think of it more like a
rebate on your payroll costs. The government will pay you back up to 50% –
70% of your payroll.
If your business qualifies for the ERC tax credit, you could receive as much as
$26,000 per employee and this money does not have to be paid back.
Additionally, there are no rules for how it’s spent
How Does Your Business Qualify for The ERC Tax Credit from the IRS?
Any employer that meets one of the following three conditions is a potential
candidate for the ERC tax credit:
1. The business was fully or partially suspended due to a government
order, with a more than nominal impact on the business.
2. The business experienced a significant decline in gross receipts for any
one quarter in 2020 or 2021, compared to that same quarter of 2019.
3. The business was started/opened after February 15th, 2020, and has
an annual revenue of less than $1 million.
Remember – the business must meet only one of the three tests to qualify for
the credit. For example, about every sit-down restaurant would qualify for the
credit under the first test since their indoor dining capacity was limited (which
counts as a partial shutdown) by a government order throughout the
pandemic in practically every state in the nation.
This means that since they meet the first test, they don’t have to worry about
meeting the other two. Even if sales are up and better than before, they would
still get the credit.
How Is the ERC Tax Credit Calculated?
The credit is calculated based on applying the rebate rate (50% – 70%) to the
“qualified wages” the business paid out in 2020 and 2021. The exact rebate
percentage depends on the year of the quarter in which you are claiming the
credit
ERC Tax Credit Calculations Can Be Complicated
Your business cannot claim the ERC for wages that were relied on to obtain
PPP forgiveness. ERC applicants must analyze multiple sets of data to ensure
accuracy and proper wage allocations, to achieve the goal.
The goal is for your business to obtain the greatest ERC refund possible,
while also retaining 100% of your PPP loan forgiveness. It’s the most
important part of the process and needs to be done carefully and correctly.
Regardless of the complicated analysis and calculations, this is a huge
opportunity for businesses to recover losses they suffered, and are still
suffering, due to COVID-19.
While certain Covid relief programs have ended, the ERC program is still
ongoing, and your business deserves the opportunity for recovery.
The ERC Center Can Help with ERC Tax Credit Applications
The ERC Center has representatives ready to help you qualify for the program
and navigate the complicated calculations to maximize your benefits, as we
have for many other businesses.
There is no cost and no obligation for a consultation.
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