What is the Employee Retention Credit?
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
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
How much ERC can you claim if you claim PPP?
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. Unfortunately, the program is not yet living up to its full potential because many business owners are prematurely disqualifying themselves due to misinformation and rumors about who does or doesn’t qualify.
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.
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. 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 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 additional information about is erc taxable check this resource: visit here