Claim The Employee Retention Credit Today
Was your business impacted by the COVID-19 pandemic?
What is the Employee Retention Credit?
The Employee Retention Credit (ERC) offers a refundable tax credit on the payroll taxes paid on qualifying wages during the COVID-19 pandemic.
The COVID-19 pandemic caused vast and widespread hardships to employees, employers, businesses and operations that we are still facing today. The ERC is a tax credit introduced under the CARES Act to help businesses recover from the effects. This incentive was designed to encourage and reward businesses to keep employees on payroll by providing a tax credit for qualified wages and expenses paid for by your business.
Does your business qualify for this tax credit? For the calendar year 2020, employers with less than 100 employees who paid qualified wages after March 12, 2020 and before January 1, 2021 can potentially claim the credit in 2020. For the calendar year 2021, eligible employers with less than 500 employees can potentially claim the credit for qualified wages paid to employees after Dec. 31, 2020, and before Oct. 1, 2021.
To learn more about the specific program details, request a complimentary consultation with one of our specialty tax credit associates.
How to Apply for the Employee Retention Tax Credit
Initial Consultation
Eligibility Assessment
Qualification Verification
Precise Calculations
Tax Credit Application
Future-Proofing
Forge an optimized future by partnering with Done Right Funding to streamline the process of claiming future credits with enhanced efficiency.
Common Questions About the R&D Tax Credit
Under the CARES Act of 2020, businesses may be eligible for the ERC if they had employees and operated a trade or business, which includes tax-exempt organizations. However, with limited exceptions, it does not apply to governments or their agencies and instrumentalities. A small eligible employer for 2020 is an employer that had 100 or fewer full-time (30 hours per week or more) employees on average per month in 2019, and for 2021 had 500 or fewer full-time employees on average per month in 2019.
Your business may be eligible for the ERC if its operations were fully or partially suspended by governmental COVID-19 orders limiting commerce, travel or group meetings or experienced a significant decline in gross receipts during 2020 or the first three quarters of 2021. If your business started to operate on or after February 15, 2020, it may qualify to claim the ERC for the third or fourth quarters of 2021 as a recovery startup business.
An employer had a significant decline in gross receipts in 2020 during the first calendar quarter for which gross receipts for that quarter were less than 50% of those for the same calendar quarter in 2019.
An employer had a significant decline in gross receipts in 2021 during the first calendar quarter for which gross receipts for that quarter were less than 80% of those for the same calendar quarter in 2019.
You can calculate your ERC based on total qualified wages. Those wages include health plan expenses paid by your employees. This calculation varies based on the number of employees your business had in 2020 and 2021, and other factors such as wages paid with PPP loans or wages paid to owners and their relatives.
The ERC equals 50% of the qualified wages for 2020 and 70% for 2021. Note that the maximum credit amount is for 2020 is $5,000 per employee for the calendar year and for 2021 is $7,000 per employee per quarter.
No, your ERC is not a loan and does not have repayment terms. Why? Because it’s a refundable tax credit for businesses.
Employers who received the ERC for 2020 or 2021 or both, however, must amend their corporate income tax returns (and personal returns if a corporation is a pass through entity) for the relevant years.
The Paycheck Protection Program (PPP), which ended on May 31, 2021, was a forgivable loan. It provided small businesses with funds to pay up to eight weeks of payroll costs, including benefits. Funds from the PPP loan also could be used by those businesses to pay interest on mortgages, rent and utilities.
The ERC is a tax credit established to encourage eligible employers to keep their employees on the payroll during the COVID-19 outbreak. It’s a refundable and non-refundable credit that businesses can claim on qualified wages, including some health insurance costs, paid to employees.
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