Important Specifics Of Employee Retention Credit

What is the Employee Retention Credit?

Simply put, the Employee Retention credit (ERC), is exactly what it sounds. It rewards business owners for keeping employees on payroll during the pandemic. Washington decision-makers are closely involved in this national effort to help the U.S. recover from the pandemic and come back stronger than ever before.

5 Things to Know about the ERC

To help you cut through the noise, we’re debunking the most common misunderstandings currently circulating in the ERC world. This is important:

ERC is not for every business.

Most likely, you won’t be able to claim $26k per employee

Not every COVID impact qualifies a business

Not every government guideline qualifies a business

How much ERC can you claim if you claim PPP?

How to Qualify

The ERC has gone through significant updates, so even if you or your tax advisor have reviewed this credit before, we encourage you to take another look with one of our specialists. The program is still not living up to its potential. Many business owners are disqualifying themselves prematurely due to misinformation about who qualifies and who doesn’t.

The overarching theme for businesses to focus on is how the coronavirus pandemic impacted our economy as a whole… so even if your business grew or was deemed an essential business during the pandemic, there are more qualifying factors to look at before you disqualify yourself.

This payroll tax credit is available to essential and non-essential businesses in any industry that endured the effects of the pandemic. Government orders–on federal, state, and local levels–are a major factor that many business owners had to adapt to over the last year and a half. Examples of affected businesses include a restaurant that could not let customers dine indoors or a manufacturer that had to slow their operations due to new health and safety restrictions.

These are some factors to consider when determining whether your business is eligible for the ERC.

Full shutdowns;

Partial shut downs

Interrupted operations;

Supply chain disruptions

Inability to access equipment;

Limited capacity to operate;

Inability to work with your vendors;

Reduced services or goods provided to customers

Cut down on your hours of operation; and

Shifting hours can improve sanitation in your facility

Check out about how does erc credit work go this web page