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.

5 Things to Know about the ERC

We’re going to help you cut through all the noise. You should know that:

ERC is not for every business.

You likely can’t claim $26k for every 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. 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.

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. 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.

These are some factors to consider when determining whether your business is eligible for the ERC.

Full shutdowns;

Partial shutdowns;

Operation interruptions

Supply chain disruptions

Inability to access equipment

Limited capacity to operate;

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 can improve sanitation in your facility

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