Employee Retention Credit (ERC) Eligibility: Two Ways To Claim?

Government regulations and legislation are notoriously tough to obey. And, dare we say, harmful if a document is incorrectly completed. This encourages people and corporations to second-guess those rare opportunities. This involves the opportunity of claiming the Employee Retention Credit. 

This was seen with PPP loans and is now being seen with the Employee Retention Tax Credit (ERTC). The retroactive deadline for the ERTC was originally scheduled for January 1, 2022. However, it was moved out to October 1, 2021, resulting in qualifying changes. So, let's delve deep into this employee retention credit blog, which will discuss all about ERTC, including ERC specialists, qualifications, and much more. 

Employee Retention Tax Credit: What Is It?

The CARES Act established the ERTC. ERC assists businesses in keeping staff on the payroll. Eligible employers and small to medium-sized organizations come under this act. They can claim up to 50% of qualifying salaries between March 13 and December 31, 2020.

Employers who lend money through the Paycheck Protection Program (PPP) are still eligible for the ERTC. During Q1 and Q2 of 2021, a company that receives the ERTC can receive up to $10,000 in refundable credit per employee each quarter.

Only 4% of small business owners are aware of the ERTC program, according to the National Federation of Independent Business (NFIB). However, this little-known government assistance offers significant business benefits.

With employee retention being such a significant problem, the government knows that you must be able to pay your staff to keep them. The ERTC is a lifeline for businesses dealing with many unforeseen events in recent years.

So, how can you make the most of this government assistance? Is there a snag here? What are the requirements? The next section of this Employee Retention Tax Credit guide will discuss how ERC works. 

Employee Retention Credit: How Does It Work?

The Employee Retention Benefit is a refundable tax credit for qualifying employers. Specific business owners are entitled to a proportion of qualified earnings paid to employees after March 12, 2020, but before January 1, 2021. It is based on specific parameters such as the employment cap and qualified wages.

So, let's first see the Employee Retention Credit qualifications. 

Who Is Eligible For The Credit For Staff Retention?

The Employee Retention Credit (ERC) is a tax credit available to employers to help them keep their employees on payroll during the economic downturn caused by the COVID-19 pandemic. To be eligible for the credit, an employer must meet certain criteria:

 

• The employer's business must have been fully or partially suspended due to government orders related to COVID-19 during the calendar quarter. Or the employer must have experienced a significant decline in gross receipts.

 

• Employers with more than 100 employees in 2019 are generally not eligible for the credit, but there are some exceptions.

 

• Employers are not eligible for the credit if they take a Small Business Interruption Loan under the Paycheck Protection Program (PPP) and claim the ERC for the same wages for the same period.

 

• The credit is available for wages from March 13, 2020, through December 31, 2020.

 

It's worth noting that the eligibility and the amount of credit may change per the government's policy. So, it's best to check with the IRS for the most up-to-date information on the credit.

Is It Possible To Receive Credit For Both PPP And Staff Retention?

The PPP and ERC are two separate programs. Both help employers keep their employees on the payroll during the economic downturn caused by the COVID-19 pandemic.

 

• Employers who take a PPP loan are generally not eligible to claim the Employee Retention Credit for the same wages for the same period. However, if the employer has used the PPP loan for expenses other than payroll and still has eligible wages, they may be able to claim the ERC for those wages.

 

• Employers who have exhausted their PPP funds and still have eligible wages can also claim the ERC.

 

• It's crucial to note that there are some situations where an employer can claim both the PPP and ERC. But it will depend on the specific circumstances, and it's best to consult with Employee Retention Credit experts to determine if you are eligible for both and, if so, how to claim them correctly.

Keep in mind that the rules and limitations for these programs change frequently, and it's best to check with the IRS for the most up-to-minute information.

Can I Claim The Employee Retention Credit, Now?

It is no longer possible for businesses to claim the Employee Retention Tax Credit, but they have until 2024, and in some cases until 2025, to do so. This can happen if you have properly filed the employment tax return by the deadlines. Thus, it makes vital for us to take the help of ERC specialists. 

So if you have paid wages between March 13, 2020, and December 31, 2021. And your business was fully or partially suspended due to government orders related to COVID-19 during the calendar quarter, or the employer must have experienced a significant decline in gross receipts, you may be eligible to claim the credit.

Keep in mind that the rules and regulations for this program change frequently. Therefore, it's best to check with the IRS for the most up-to-date information on the credit. This includes the most recent extension and other eligibility criteria changes. It's also advisable to consult ERC specialists to determine if you are eligible for the credit. And, if so, how to claim it correctly.

What Is The Best Way To Apply For The ERC?

With ERC specialists, you can apply for it only if you meet the employee retention credit qualifications, but of course, the process will be easy with Employee Retention Credit expert. Credit specialists can simplify the process and remove complexities associated with credit claims. Simply go to their website and upload your documents. After that, they will contact you once they examine your ERC eligibility and how much credit you can receive. So, why wait? Take advantage of this now!