The Employee Retention Credit
What is the ERC?
Discover how eligible businesses can benefit from the payroll tax refund program, which provides up to $26,000 per employee retained on payroll during the pandemic.
Overview
What is the Employee Retention Credit?
The Employee Retention Credit (ERC) is a provision established under the CARES Act in response to the COVID-19 pandemic. The primary goal of this credit is to provide financial support to businesses impacted by the pandemic and encourage them to retain their employees, even if operations were disrupted or suspended. The ERC offers eligible employers a refundable tax credit of up to $26,000 per employee for a portion of the qualified wages paid to their employees in 2020 and 2021.
Does My Business Qualify for ERC?
Employers may qualify for ERC under one of the following criteria. However, they must adhere to specific rules and requirements, which depend on the number of employees, the dates that the qualified wages were paid, and the specific legislation in effect during the relevant period.
Full or partial suspension of operations due to a government-ordered shutdown
Decline in gross receipts compared to 2019
Supply chain disruption resulting from a government-ordered shutdown
Recovery startup business
What is My Potential Credit Amount?
The amount of ERC credit will vary depending on the eligibility of the employer, the number of employers, and the definition of "qualifying wages," which may vary depending on unique facts and circumstances under the law.
For 2020, the maximum amount of qualifying wages per year per employee that earns ERC at a 50% rate is $10,000 (max 2020 ERC = $5,000/employee/year).
For 2021, the maximum amount of qualifying wages per quarter per employee that earns ERC at a 70% rate is $10,000 (max 2021 ERC = $7,000/employee/quarter x 3 quarters = $21,000/employee/year)
ERC for the 4th quarter of 2021 is possible at $7,000/employee if the business is a recovery startup business (but the entire business is limited to $50,000 per eligible quarter as a recovery startup business).
Is it Too Late to Apply for ERC?
The Employee Retention Credit deadline for the 2020 tax year already passed on April 15, 2024. However, the deadline for the 2021 tax year is April 15, 2025.
How we Can Help
Maximize Your Employee Retention Tax Credit
Navigating the complex regulations of the Employee Retention Credit can be a daunting task for eligible businesses impacted by the pandemic. However, with the potential for significant financial benefits, it's essential to ensure that you don't leave money on the table. Trust the experts at Robert J. Wellen, Jr., P.A., a licensed, professional specialty tax firm with over 30 years of audit experience, to guide you through the process and help you claim your ERC benefits with confidence.
Qualify for ERC with Our Expertise
Businesses often assume that they are not eligible for the Employee Retention Credit (ERC) unless they have reported a significant revenue decline, received “non-essential business” status, or forfeited their right to the ERC after claiming PPP1, PPP2, or both - but that's not always the case. There are several other ways to potentially qualify for the ERC, including capacity restrictions, supply chain disruption, travel restrictions, commerce disruption, group gathering limitations, vendor and customer restrictions, full or partial shutdowns, jobsite or customer shutdowns, and work-from-home orders as a result of federal, state, or local mandate.
We have found that many businesses are unaware of their eligibility for the ERC or do not know how to take advantage of this credit. That's where we come in. Our tax experts can help you determine if you qualify for the ERC based on various factors, and we'll work to maximize your benefits while ensuring full compliance with IRS standards. Don't leave money on the table - book your free consultation with us today and learn how we can help you claim your ERC benefits.
Existing ERC Clients
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