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.
5 Things to Know about the ERC
We’re going to help you cut through all the noise. You should know that:
ERC is not for every business.
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.
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. 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.
These are some factors to consider when determining whether your business is eligible for the ERC.
Shut down completely
Partial shutdowns;
Interrupted operations;
Supply chain disruptions
Inability to access equipment;
Capacity to operate is limited
Inability to communicate with vendors
Reduced services or goods provided to customers
Reduce your operating hours.
Shifting hours to increase sanitation of your facility
For more details about erc employee retention credit you can check this resource