What is the Employee Retention Credit?
Simply put, the Employee Retention credit (ERC), is exactly what it sounds. It rewards business owners for keeping employees on payroll during the pandemic. Washington decision-makers are closely involved in this national effort to help the U.S. recover from the pandemic and come back stronger than ever 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:
ERC is not for every business.
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
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.
This payroll tax credit is available to essential and non-essential businesses in any industry that endured the effects of the pandemic. Government orders–on federal, state, and local levels–are a major factor that many business owners had to adapt to over the last year and a half. 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 shutdowns;
Operation interruptions
Supply chain disruptions
Inability to access equipment
Capacity to operate is limited
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
For details about erc irs check out the best webpage