What is the Employee Retention Credit?
U.S. Congress approved the $2.2 trillion CARES Act as relief provisions. The CARES Act covered multiple benefits for businesses and the general public.
As part of the CARES Act, the Employee Retention Tax Credit (ERTC or ERC) was established to incentivize companies to keep paying their workers by offering credit to eligible employers for wages provided to eligible employees. This was done by giving credit to the qualified company.
Available credit or refund is for qualified wages paid from March 13, 2020, through December 31, 2021
A BRIEF HISTORY OF THE ERC
March 2020
ERC & PPP enacted by congress, business could get either PPP or ERC not both
November 2020
Businesses focus on PPP & the government pushes PPP
January 2021
IRS changes the rules and businesses that received PPP can also claim ERC
April 2022
Only an estimated 12% of businesses eligible to claim the credit have claimed it. Billions of $$$ will go unclaimed
Simplified 5-Step ERC process
- Determine if you are an eligible employer for ERC for any quarters by applying each test separately.
- Based on your employment level in 2019, determine your ERC eligible wages.
- Compute your ERC qualified wages (excluding wages used for PPP forgiveness and other tax credits).
- Calculate ERC and coordinate efforts with your payroll provider on options to claim benefit.
- Complete audit file substantiating ERC.
Is your business eligible?
Your business was forced to partially or fully suspend or limit operations by a governmental order, and saw a nominal disruption to business operations
OR
Your business experienced a 50% decline in gross receipts during any quarter in 2020 versus the same quarter in 2019 and/or a 20% decline in gross receipts during any quarter in 2021 versus the same quarter in 2019
OR
Your business began operations on or after February 15, 2020
HOW IT WORKS
Claim your Employee Retention Tax Credit
Our goal is to help businesses calculate their potential Employee Retention Tax Credit in an efficient manner. Detailed studies on eligibility will give you peace of mind when filing documents with the IRS.
DATA GATHERING
Using a secure document portal, upload your PPP loan documents, share payroll data, and answer preliminary questions.
AMENDING RETURNS
Tax specialists that we work with will prepare and audit all docs and help you file the necessary amended payroll tax returns.
CREDIT CALCULATION
Tax specialists will calculate the exact credit amount you will receive from the IRS. Our experts then review every detail to make sure everything is filed perfectly with the IRS.
GET PAID
The IRS will process the credit and mail you a check(s).
ERC in the News
You’ve likely been hearing a lot of noise surrounding the Employee Retention Credit (ERC), such as recent IRS warnings and Bloomberg’s suggestions on choosing a reliable provider.
See excerpts below.
Sources: https://www.irs.gov/newsroom/employers-warned-to-beware-of-third-parties-promoting-improper-employee-retention-credit-claims & https://news.bloombergtax.com/tax-insights-and-commentary/the-employee-retention-credit-has-spawned-a-new-business-niche
FREQUENTLY ASKED QUESTIONS
The Employee Retention Credit is a payroll tax credit that almost every business qualifies for under the CARES Act. It was designed to help small and medium-sized businesses retain their employees during these difficult times. The credit is simply refunding payroll costs already spent and any surplus that may be available.
No. When calculating the ERC, an employer can include wages given to part-time and full-time workers, but can only compute the credits on the first $10,000 in salary and health plan expenses paid to each employee during each credit-generating period.
This is the most frequent question we get from employers that are willing to explore the Employee Retention Tax Credit despite extremely bad advice from their accountant. Your accountant is well-meaning and is working to protect you. However, they are not familiar with the changes made to the ERTC regulations which allow every business that received a PPP loan to also qualify for the ERTC.
While eligibility per state can be nuanced based on various shutdown policies and mandates, most businesses in every state are eligible if they meet one of the two following criteria: The employer experiences a significant decline in gross receipts, OR the employer’s business operations are/were fully or partially suspended due to a governmental order.
Yes, it is still possible for you to qualify. Essential businesses that experienced a significant decline in gross receipts or a full or partial suspension of operations due to governmental order may qualify.
Yes, you still qualify. PPP loan funds used to pay payroll expenses during eligible quarters will be disqualified. As stated in FAQ (3), you are eligible for the ERTC even if you received a PPP loan.
Most payroll service providers are happy to file your 941-X amended returns which is the last step in the process. Determining your eligibility and maximizing your credit is not something most payroll service providers are providing as a service to their customers. We work with all the major payroll service providers to get this credit filed. ERTC is a one-time niche filing service that payroll service providers are simply not interested in dedicating time and resources towards. This includes the likes of ADP, Paychex, Paycom, Quickbooks, and more.
Almost every industry including restaurants and bars, chiropractors, manufacturers, law firms, aerospace, technology, healthcare, grocery stores, personal care facilities, and more have found to be eligible. Please contact us to explore your eligibility.
Business Questionnaire
It takes just a few minutes! With these few details about your business.
Integrity Wealth Advisors are not registered tax preparers. ERC related IRS forms are processed by tax specialists.