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. 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. You should know that:
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
How much ERC can you claim if you claim PPP?
How to Qualify
Even if you have already reviewed the ERC, we recommend that you take a second look with one 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.
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. 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:
Full shutdowns;
Partial shut downs
Operation interruptions
Supply chain disruptions
Inability to access equipment;
Limited capacity to operate;
Inability to work with your vendors;
Reduction in services or goods offered to your customers;
Reduce your operating hours.
Shifting hours to increase sanitation of your facility
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