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.
Five Things You Need 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. One example of a affected business is a restaurant that couldn’t allow customers to eat indoors, or a manufacturer who had to slow down their operations because of new safety and health regulations.
These are some factors to consider when determining whether your business is eligible for the ERC.
Shut down completely
Partial shutdowns;
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
Reduce your operating hours.
Shifting hours to increase sanitation of your facility
For additional information about erc irs go to our new resource
