What is the Employee Retention Credit?
Putting it simply, the Employee Retention Credit (ERC) is exactly what it sounds like–business owners are being rewarded for their efforts to keep employees on payroll during the pandemic. We are working closely with decision-makers in Washington on this nationwide effort to help the U.S. economy not only recover from the pandemic but come back stronger than 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:
ERC is not for every business.
You likely can’t claim $26k for every employee
Not every COVID impact qualifies a business
Not every government guideline qualifies a business
Claiming PPP affects how much ERC can be claimed
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.
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.
The payroll tax credit is available to all essential and non-essential companies in any industry that has suffered the effects of the pandemic. Many business owners have had to adjust to the fact that there were many government orders at all levels, including those from the federal, state and local governments. 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.
Here are some impacts to consider that help you determine your business’s eligibility for the ERC:
Shut down completely
Partial shutdowns;
Interrupted operations;
Supply chain interruptions;
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
For additional information about erc wages you can check our new webpage: look at here now