Fundamental Information About Employee Retention Credit

What is the Employee Retention Credit and how does it work?

Simply put, the Employee Retention credit (ERC), is exactly what it sounds. It rewards business owners for keeping 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. 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

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. 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.

The payroll tax credit is available to all essential and non-essential companies in any industry that has suffered 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.

Here are some impacts to consider that help you determine your business’s eligibility for the ERC:

Full shutdowns;

Partial shutdowns;

Operation interruptions

Supply chain disruptions

Inability to access equipment

Capacity to operate is limited

Inability to communicate with vendors

Reduced services or goods provided to customers

Cut down on your hours of operation; and

Shifting hours to increase sanitation of your facility

For details about erc income have a look at our new internet page