Employee Retention Credit

Yes. The Taxpayer Certainty and Disaster Tax Relief Act of 2020, enacted December 27, 2020, modified the ERC credit rules. One of the modifications included allowing a company to have a PPP loan and still take advantage of the ERC credit. However, you can’t use the same dollar for dollar funds. We take this into account when processing your ERC credit.

This is not a lending program – tax refunds are issued by the US Treasury. Therefore, all eligible employers will receive the funds.

No. This is not a loan. It’s a refundable tax credit. When we file your ERC claim we request a refund check for you.

We understand your refund check may not arrive for several months (16 weeks minimum according to IRS documentation). We offer two payment options: you may pay your fee upfront at a discount – or – the full fee can be deducted from your refund once received. Upfront payments can be completed by credit card. Regardless, our fee is covered by our 100% Money Back Guarantee. If the IRS does not release the credit claimed for any reason, we will refund any payments made.

The ERC credit is not considered income for federal income tax purposes, but you must reduce any deductible wage expenses by the amount of the credit. Please provide the credit information to your CPA for tax purposes.

We charge a contingency fee of 15% of the amount of ERC refund that the business receives. These fees are not due until the business receives the refund amount back from the IRS.

The calculation of the ERC is based on a formula provided by the IRS. Yes, this amount is typically within range of what the business paid in payroll taxes during the timeframe they are qualified for the ERC, but sometimes this refund can be more than the amount of taxes the business paid.

Of course. The challenge is the ERC credit is taken on your payroll returns and not through your business income tax returns, which is what most CPA’s handle. Because of this most CPA’s don’t process this credit, unless they process your payroll in house. This is also a big reason why this credit is so underutilized. Since CPA’s don’t typically handle it and they are the tax experts, it has mostly fallen in a middle ground where few are able to effectively process the credit. Interestingly, we receive a large portion of our clients from CPA’s.

At ERC Specialists we have decades of payroll experience, which has allowed us to specifically focus on understanding and maximizing the ERC program. In our experience we have found that due to the complexity (the ERC tax code is over 200 pages) and time investment necessary to understand the ERC program, very few are able to effectively maximize this sizable credit for your business.

Maybe. Wages of owners who have majority ownership, defined as over 50%, do not qualify, nor do the W2 wages of any immediate family members of the owner. In the case that an owner has less than 50% ownership, their W2 wages may qualify, as do the W2 wages paid to immediate family members.

Yes! There are two possible qualifications for 2020: revenue reduction, or a “full or partial shutdown of your business due to COVID-19”. Specifically the IRS describes this as “A government authority required partial or full shutdown of your business during 2020 or 2021. This includes your operations being limited by commerce, inability to travel or restrictions of group meetings.” Below are several examples of qualifying events:

Example 1: A restaurant must close or limit its on-site dining. Such as having to close down every other table, due to COVID-19 restrictions.

Example 2: A business that needs to meet with clients in person and has to cancel meetings due to COVID-19 restrictions.

Example 3: A business has to reduce their operating hours because COVID-19 restrictions and cleaning requirements.

Example 4: A business had delayed production timelines caused by supply chain disruptions.

Example 5: A business with a planned event has to cancel that event, or restrict the amount of people who can attend due to COVID-19 restrictions.

Maybe. There are several factors that play into who can qualify for the ERC. Reach out to our team and we can quickly determine if it makes sense for your business to pursue the ERC.

Absolutely! Please contact us to discuss.

This is how the process works: you send us the required documents and we process an analysis at no charge. This analysis typically takes 3-5 days to complete. If you wish to move forward, you will select your desired payment option and we file your claim. Once filed, refunds are released based on the IRS backlog. Currently, the IRS has stipulated a 16 week minimum turnaround on the ERC refunds.