What is the Employee Retention Credit and how does it work?
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.
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
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
Even if you have already reviewed the ERC, we recommend that you take a second look with one 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. 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.
Full shutdowns;
Partial shut downs
Interrupted operations;
Supply chain interruptions;
Inability to access equipment
Capacity to operate is limited
Inability to work with your vendors;
Reduced services or goods provided to customers
Reduce your operating hours.
Shifting hours can improve sanitation in your facility
More info about erc irs view this webpage: check here