Significant 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.

Five Things You Need 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:

Not every business qualifies for ERC

You likely can’t claim $26k for every 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. Unfortunately, the program is not yet living up to its full potential because many business owners are prematurely disqualifying themselves due to misinformation and rumors about who does or doesn’t qualify.

Businesses should focus on the overall theme of how the coronavirus virus pandemic affected our economy. This means that even if your company grew during the pandemic, you need to consider other factors before disqualifying 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. One example of a affected business is a restaurant that couldn’t allow customers to eat indoors, or a manufacturer who had to slow down their operations because of new safety and health regulations.

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

Shut down completely

Partial shut downs

Operation interruptions

Supply chain interruptions;

Inability to access equipment;

Capacity to operate is limited

Inability to communicate with vendors

Reduction in services or goods offered to your customers;

Cut down on your hours of operation; and

Shifting hours to increase sanitation of your facility

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