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. 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.

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. This is important:

Not every business qualifies for ERC

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

Claiming PPP affects how much ERC can be claimed

How to Qualify

The ERC has gone through significant updates, so even if you or your tax advisor have reviewed this credit before, we encourage you to take another look with one of 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.

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;

Interrupted operations;

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 to increase sanitation of your facility

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