Essential Details About Employee Retention Credit

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

We’re going to help you cut through all the noise. You should know that:

Not every business qualifies for ERC

Most likely, you won’t be able to claim $26k per 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

The ERC has gone through significant updates, so even if you or your tax advisor have reviewed this credit before, we encourage you to take another look with one of our specialists. Unfortunately, the program is not yet living up to its full potential because many business owners are prematurely disqualifying themselves due to misinformation and rumors about who does or doesn’t qualify.

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. Examples of affected businesses include a restaurant that could not let customers dine indoors or a manufacturer that had to slow their operations due to new health and safety restrictions.

Here are some impacts to consider that help you determine your business’s eligibility for the ERC:

Shut down completely

Partial shut downs

Operation interruptions

Supply chain disruptions

Inability to access equipment;

Limited capacity to operate;

Inability to communicate with vendors

Reduced services or goods provided to customers

Cut down on your hours of operation; and

Shifting hours can improve sanitation in your facility

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