Frequently Asked Questions About The Employee Retention Credit (ERC)
What is the ERC?
The ERC is a refund for money paid out to payroll taxes during 2021 and 2022. It’s a less advertised series of cash disbursements being issued to help business owners keep employees on the payroll.
How does it work?
Business owners can get back up to $5,000 per employee in 2020 and up to $7,000 per employee for each quarter of 2021. For example, if an employer with 10 employees qualifies during 2 quarters, they can get back up to $140,000! We know what you’re thinking, why doesn’t every small business know about the ERC?! Our thoughts exactly.
How do I know if my business qualifies for the ERC?
The short answer if your revenue was reduced by 50% in 2020 compared to 2019 in any one quarter or it was reduced by 20% in 2021 compared to 2019 in any one quarter, your business could qualify.
We know that calculating those numbers and moving through the bureaucratic red tape of government systems is confusing and frustrating. If you can’t figure out how to calculate your ERC, we can help you. We’ve made it our business to understand these processes. We’ve already helped multiple business owners claim between $15,000 and $350,000 dollars back from this process. This is a time when it literally pays to hire an expert.
Do I still qualify for the ERC if I received a PPP or PPP2 loan?
You may still be eligible to claim the ERC if you’ve received a PPP or PPP 2 loan that has been forgiven. However, some restrictions and guidelines apply. Schedule your free call with us to learn more.
Is my payroll company responsible for calculation errors on the ERC?
While major payroll companies may be able to assist with the process, the majority do not verify if the wages provided meet IRS qualifications. The employer is solely responsible for the calculation of the ERC. You can read our blog post on how this works.
Can I get audited by the IRS for the ERC?
The American Rescue Plan Act extended the statute of limitations to 5 years for auditing the ERC. This means that you could be audited anytime in the next five years. Here are three ways you can prepare your paperwork just in case you get audited.
You Can Still Apply for the ERC
If you haven’t applied for the Employee Retention Credit (ERC), your company could be missing out on (basically) free money. Most businesses are eligible for multiple ERC credits, but calculating your numbers and following government guidelines can be intimidating.
If you’ve already calculated your ERC but now you’re sweating whether it’s correct. We can review and amend your ERC to make sure you have the right numbers and detailed records.
Miscalculating your ERC could cost you if you are audited and you don’t prepare yourself now. We offer full-service ERC calculation and we create detailed records for all of our clients in preparation for an audit, whether it happens or not.