Search engine for touristic excursions to any place in the world What is the Employee Retention Credit and how does it work?
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. This is important:
Not every business qualifies for ERC
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
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.
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.
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;
Capacity to operate is limited
Inability to communicate with 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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