What is the Employee Retention Credit and how does it work?
Putting it simply, the Employee Retention Credit (ERC) is exactly what it sounds like–business owners are being rewarded for their efforts to keep 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
To help you cut through the noise, we’re debunking the most common misunderstandings currently circulating in the ERC world. You should know that:
Not every business qualifies for ERC
You likely can’t claim $26k for every employee
Not every COVID impact qualifies a business
Not every government guideline qualifies a business
How much ERC can you claim if you claim PPP?
How to Qualify
Even if you have already reviewed the ERC, we recommend that you take a second look with one our specialists. The program is still not living up to its potential. Many business owners are disqualifying themselves prematurely due to misinformation about who qualifies and who doesn’t.
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.
The payroll tax credit is available to all essential and non-essential companies in any industry that has suffered 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:
Full shutdowns;
Partial shut downs
Interrupted operations;
Supply chain disruptions
Inability to access equipment
Limited capacity to operate;
Inability to work with your vendors;
Reduction in services or goods offered to your customers;
Cut down on your hours of operation; and
Shifting hours to increase sanitation of your facility
To learn more about are erc credits taxable view this popular webpage: click for more info