ERC Tax Credits: Maximize Employee Retention Credit Funding for Your Businesses
Was your business impacted by COVID-19? Get qualified for the program, today. Details of the program include:
Up to $26,000 per employee
Available for 2020 and the first 3 quarters of 2021
Qualify with decreased revenue or COVID event
No limit on funding (ERC is not a loan)
ERC is a refundable tax credit
What is the Employee Retention Credit?
Take a deep dive on the how the Employee Retention Credit can help your business with our free e-book!
WHY ERC Tax Credit SPECIALISTS?
READY TO GET STARTED?
Qualifications for EMPLOYEE reTENTION cREDIT
While the general qualifications for the ERC program seem simple, the interpretation of each qualification is very complex. Our significant experience allows us to ensure we maximize any qualifications that may be available to your company.
GROSS RECEIPTS REDUCTION
Gross receipt reduction criteria is different for 2020 and 2021, but is measured against the current quarter as compared to 2019 pre-COVID amounts.
FULL OR PARTIAL SUSPENSION OF BUSINESS OPERATIONS
A government authority required partial or full shutdown of your business during 2020 or 2021. This includes your operations being limited by commerce, inability to travel or restrictions of group meetings.
DID YOU TAKE A PPP LOAN ALREADY? NOT TO WORRY.
The ERC is retroactive to the effective date included in the CARES Act, the 2020 provision:
Paycheck Protection Program (PPP)
Employers who received Paycheck Protection Program (PPP) loans may still qualify for the ERC with respect to wages that are not paid for with PPP proceeds.
Specifies the amount of gross receipts for certain tax-exempt organizations.
group health-plan expenses
Specifies that group health-plan expenses can be considered qualified wages despite no other wages having been paid to the employee, consistent with IRS guidance.
EMPLOYEE RETENTION CREDIT FAQ
Many questions can come up during the job application and hiring process. We’ve compiled a list of some of the most common questions we hear and their answers below. For further questions, email us at firstname.lastname@example.org.
CAN I GET ERC FUNDS IF I ALREADY TOOK THE PPP?
Yes. The Taxpayer Certainty and Disaster Tax Relief Act of 2020, enacted December 27, 2020, modified the ERC credit rules. One of the modifications included allowing a company to have a PPP loan and still take advantage of the ERC credit. However, you can’t use the same dollar for dollar funds. We take this into account when processing your ERC credit.
HOW MUCH DO YOU CHARGE?
We charge a flat fee for our services based on the amount of employees that qualify for the ERC. This is in alignment with how the IRS requires tax consultants and preparers to charge for services. We calculate and provide our fee with our free analysis. Since we are typically able to recover 10-20% more than someone less familiar with the program, our fee is very affordable. Just like a good CPA, using the right team for this process pays for itself.
MY REVENUE WENT UP IN 2020, CAN I STILL QUALIFY FOR THE ERC PROGRAM?
Yes! There are two possible qualifications for 2020: revenue reduction, or a “full or partial shutdown of your business due to COVID-19”. Specifically the IRS describes this as “A government authority required partial or full shutdown of your business during 2020 or 2021. This includes your operations being limited by commerce, inability to travel or restrictions of group meetings.” Below are several examples of qualifying events:
Example 1: A restaurant must close or limit its on-site dining. Such as having to close down every other table, due to COVID-19 restrictions.
Example 2: A business that needs to meet with clients in person and has to cancel meetings due to COVID-19 restrictions.
Example 3: A business has to reduce their operating hours because COVID-19 restrictions and cleaning requirements.
Example 4: A business had delayed production timelines caused by supply chain disruptions.
Example 5: A business with a planned event has to cancel that event, or restrict the amount of people who can attend due to COVID-19 restrictions.
WILL THE ERC FUNDS RUN OUT?
This is not a lending program – tax refunds are issued by the US Treasury. Therefore, all eligible employers will receive the funds.
I'M GETTING MORE IN ERC CREDIT THAN I PAID IN TAXES?
Remember that this program is taken according to payroll taxes paid, not on income taxes. ERC funds not applied towards owed payroll taxes are treated as an ‘overdeposit’ of taxes that will be requested as a refund check from the IRS.
CAN I QUALIFY FOR THE ERC IF I'M SELF EMPLOYED?
No, if you are majority owner (over 50%) of your company then your wages do not qualify.
DO I HAVE TO REPAY THE ERC CREDIT?
No. This is not a loan. Its a refundable tax credit. When we file your ERC claim we request a refund check for you.
CAN'T I JUST HAVE MY CPA FILE? WHY WOULD I USE ERC SPECIALISTS?
Of course. The challenge is the ERC credit is taken on your payroll returns and not through your business income tax returns, which is what most CPA’s handle. Because of this most CPA’s don’t process this credit, unless they process your payroll in house. This is also a big reason why this credit is so underutilized. Since CPA’s don’t typically handle it and they are the tax experts, it has mostly fallen in a middle ground where few are able to effectively process the credit. Interestingly, we receive a large portion of our clients from CPA’s.
At ERC Specialists we have decades of payroll experience, which has allowed us to specifically focus to understanding and maximizing the ERC program. In our experience we have found that due to the complexity (the ERC tax code is over 200 pages) and time investment necessary to understand the ERC program, very few are able to effectively maximize this sizeable credit for your business.
I'M A CPA OR A PAYROLL COMPANY, CAN I REFER MY CLIENTS TO LG RESOURCES?
Absolutely! Please contact us to discuss.
HOW WILL I MAKE PAYMENT?
We understand your refund check may not arrive for several months (16 weeks minimum according to IRS documentation), so we offer two payment options – you may pay your fee upfront at a discount – or – the full fee can be deducted from your refund once received. Upfront payments can be completed by credit card. Regardless our fee is covered by our 100% Money Back Guarantee. If the IRS does not release the credit claimed for any reason, we will refund any payments made.
AS AN OWNER DO MY WAGES, OR THE WAGES OF ANY FAMILY MEMBER I EMPLOY QUALIFY?
Maybe. Wages of owners who have majority ownership, defined as over 50%, do not qualify, nor do the W2 wages of any immediate family members of the owner. In the case an owner has less than 50% ownership, their W2 wages qualify, as do the W2 wages paid to immediate family members.
HOW LONG DOES IT TAKE TO GET MY ERC CREDIT?
This is how the process works: you send us the required documents and we process an analysis at no charge. This analysis typically takes 3-5 days to complete. If you wish to move forward, you will select your desired payment option and we file your claim. Once filed, refunds are released based on IRS backlog. Currently, the IRS has stipulated a 16 week minimum turnaround on the ERC refunds.
IS THE ERC CREDIT TAXABLE?
The ERC credit is not considered income for federal income tax purposes, but you must reduce any deductible wage expenses by the amount of the credit. Please provide the credit information to your CPA for tax purposes.
What Our Clients Are Saying
“When I heard about the ERC program I reached out to my CPA. 30 minutes later he called and said I didn’t qualify. Out of curiosity, I had ERC Specialists see if I qualified. Turns out I received the ERC for 7 of my 9 employees. Highly recommended.”