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. 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

We’re going to help you cut through all the noise. This is important:

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. 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.

Businesses should focus on the overall theme of how the coronavirus virus pandemic affected our economy. This means that even if your company grew during the pandemic, you need to consider other factors before disqualifying 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.

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 interruptions;

Inability to access equipment

Capacity to operate is limited

Inability to communicate with vendors

Reduction in services or goods offered to your customers;

Reduce your operating hours.

Shifting hours can improve sanitation in your facility

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