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. 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.
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.
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. 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.
Shut down completely
Partial shut downs
Operation interruptions
Supply chain disruptions
Inability to access equipment
Limited capacity to operate;
Inability to communicate with vendors
Reduction in services or goods offered to your customers;
Reduce your operating hours.
Shifting hours can improve sanitation in your facility
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