The Employee Retention Credit (ERC)
This massive credit has been overlooked by many employers. We analyze your eligibility and file on your behalf.
The Employee Retention Credit (ERC) came out in March of 2020. For employers, this was the height of the COVID-19 crisis. Due to the timing, and its vague language, many companies overlooked this massive credit. It was meant to offset the costs for employers who continued to pay or partially pay employees while their business was shut down and for essential employers to adapt to new mandates. There is a lot of confusion regarding the qualifying criteria for this credit. We answer some of the frequently asked questions below.
The ERC Provides Employers Up to $26,000 Per Employee.
Many employers seem to think this does not apply to them. However, every business was impacted by the pandemic and may qualify for this credit.
If your business was shut down or made less money in 2020 than in 2019 and you continued paying your employees during this time – you are eligible for credits. This includes partial pay and paying for benefits. If salaried personnel were not able to perform their duties as they normally would – your company will qualify. If you provided hazard pay, or paid employees while out due to COVID-19 or under quarantine – your company would qualify. If your business had to reduce operating hours due to the pandemic, you would qualify. If your business had to adapt to COVID-19 mandates and protocols, you would qualify. In addition, this credit can be retroactive for three (3) years.
Frequently Asked Questions
If my business was considered essential, can we still qualify?
Both essential and non-essential businesses can be eligible for the ERC. Essential businesses were still impacted. If operations were fully or even partially suspended or if gross sales declined by 20% over that year, your company qualifies.
If we claimed the PPP, can we still be eligible for the ERC?
The stimulus package allows businesses that received Paycheck Protection Program (PPP) loans to still be eligible for the ERC. However, employers may only use the ERC towards wages that are not paid for with forgiven PPP proceeds.
My company is large, can we still qualify?
This credit is available to businesses of all sizes. Large employers can claim credit on wages paid to employees who are not providing services. For example, wages paid to salaried employees that are not performing their full duties, hazard pay, pay to employees who were out due to COVID-19 or under quarantine, and health insurance costs to furloughed employees or partially laid-off employees.
Are non-profit organizations eligible?
The ERC can be claimed against payroll taxes.
What if our company was profitable during the pandemic?
Even industries that were in high demand during the stay-at-home orders, such as logistics companies and supermarkets, are eligible. Every business was impacted by COVID-19; most will qualify for some portion of this credit.
Wouldn’t our sales have to decline by 20% to be eligible?
It is either a 20% decline in sales OR a suspension in operation – not both. If your company experienced either, you still qualify.
We are experts in capturing government credits for companies in any industry. The ERC has the potential to provide up to $26K per employee. Those qualifying credits could be in the millions depending on the size of your company.