EMPLOYEE RETENTION TAX CREDIT
LET US HELP YOU RECOVER YOUR TAX CREDITS
We are focused on maximizing your refundable claims for the Employee Retention Tax Credits, with a simple process that requires less than 15 Minutes of your time.
The Employee Retention Tax Credit
Maximizing Your Rebates For Keeping Americans Employed
The government has authorized unprecedented stimulus, and yet billions of dollars still go unclaimed.
FUNDED BY THE
The ERTC was established by the Coronavirus Aid, Relief, and Economic Security (CARES) Act, and provides a credit equal to 50 percent of qualified wages and health plan expenses paid after March 12, 2020 and before Jan. 1, 2021.
That is a per-employee $10,000 maximum of qualified 2021 wages (Q1, Q2, Q3).
That is a potential of up to $26,000 per employee!
NO REPAYMENTS - NO RESTRICTIONS
While the ERTC was created in the CARES act along with the PPP Loans - this is not a loan, there is no repayment.
There are no restrictions on what recipients of the credits may do with the funds.
UP TO $26,000 PER W2 EMPLOYEE
The 2020 ERC (or ERTC) Program is a refundable tax credit of 50% of up to $10,000 in wages paid per employee from 3/12/20-12/31/20 by an eligible employer.
That is a potential of up to $5,000 per employee.
In 2021 the ERC increased to 70% of up to $10,000 in wages paid per employee per quarter for Q1, Q2, and Q3.
That is a potential of up to $21,000 per employee.
Startups are eligible for up to $33,000.
By answering a few, simple, non-invasive questions, our team of ERTC experts can determine if you likely qualify for a no-strings-attached tax credit.
There is no cost or obligation to be pre-qualified.
We specialize in maximizing Employee Retention Tax Credits for small business owners.
Find Out What Our Tax Professionals Can Secure For Your Business Today
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EMPLOYEE RETENTION TAX CREDIT FAQS
The Coronavirus Aid, Relief, and Economic Security Act (also known as the CARES Act) was signed into law on March 27, 2020. It included two programs to assist businesses with keeping workers employed: the Payroll Protection Program (PPP) administered by the Small Business Adminstration and Employee Retention Tax Credit (ERTC) administered by the Internal Revenue Service.
PPP funds are distributed based on 2.5 months of payroll and a minimum of 80% of the funds must be used on payroll to be eligible for forgiveness. Additionally, PPP funds are not taxable as revenue and you may still take deductions for the payroll covered by PPP.
ERTC tax credits, however, are credits (or refunds) for a percentage of payroll in each quarter that you qualify. There are specific rules for determining eligibility by quarter, and limiting the dollars that can be claimed for each employee.
Initially with the CARES Act, employers could choose to apply for PPP or claim ERTC credits, but not both.
PPP was more beneficial than ERTC for most businesses (for reasons we won’t go into here) and so most businesses with under 500 employees received forgivable PPP Loans.
On March 11, 2021, The American Rescue Plan Act of 2021 was signed into law and included many modifications and expansions to existing elements of previous stimulus programs.
Noteworthy modifications for business owners included:
Businesses who applied for and received PPP funds could now also claim ERTC credits.
ERTC credits could be retroactively claimed for businesses that qualified in 2020.
ERTC credits were extended through 9/30/21 with lower qualification requirements.
The per-employee cap on qualifying wages increased from $10,000 for all of 2020 to $10,000 per quarter for the first 3 quarters of 2021.
The refundable credit amount increased from 50% of qualifying wages in 2020 to 70% in 2021.
So the short answer is “Yes”... you can claim ERTC even if you received PPP funds.
Unlike the Payroll Protection Program (administered by the Small Business Administration), there is actually no “application process” for the Employee Retention Tax Credits.
You simply claim the ERTC tax credit like you would any other tax credit - by asserting to the IRS that you can legally claim the credit.
When you claim a child tax credit, you do so by asserting this fact on your Form 1020 Personal Income Tax Return.
The difference is that when you claim an ERTC tax credit, you do so on your Form 941 Employer Quarterly Tax Filing.
For prior quarters, you must file an amended form (the Form 941-X) to reduce your current quarter’s tax contribution and request a refund of excess credits (which is highly likely).
Another perk of ERTC, is that since you can often estimate these credits in advance of distributing cash for payroll, you can file a Form 7200 to receive a cash advance to avoid waiting until the end of the quarter to apply for the refund.
You are most likely referring to a provision of the CARES Act that allowed employers to defer the deposit and payment of the employer’s share of Social Security taxes. Those deferrals must then be repaid – with at least 50% of the balance due by 12/31/21 and the remaining balance due by 12/31/22.
ERTC credits are NOT a deferral. They are dollar-for-dollar credits against wages you’ve paid. Not taxes you’ve paid, but actual wages.
These credits can offset future tax contributions or you can receive a refund check – it’s your choice.
And you will NOT have to re-pay these funds (unless, of course, you don’t provide adequate documentation in the course of an audit).
Your banker, CPA, or Financial Advisor was probably very helpful when it came to getting your PPP funds because they were effectively signing you to an SBA-guaranteed loan. The SBA paid the bank administrative fees based on the PPP loans they made, and so they were incentivized to educate you about the program and get all your paperwork in order.
Compared to the ERTC, the PPP program was also a rather simple calculation. 2½ times your average monthly payroll including health insurance and state unemployment taxes.
From the conversations we’ve had with bankers, they have no interest in involving themselves in your employment tax compliance. For them it is a liability and beyond their scope of services.
Your Payroll Service does an excellent job of executing the fundamentals of paying your employees, paying your employment taxes and filing your quarterly reports.
But computing your ERTC credits requires visibility into your P&L and PPP forgiveness applications. Not only that, but the complex requirements around eligibility and allocating ERTC credits at the employee-level while accounting for annual and quarterly qualifying wage gaps and . . . well, you can probably tell why Payroll Services are not offering to do all of this for you.
The Payroll Services that we’ve worked with so far are happy to provide the payroll registers that we need to perform the allocations. And they are happy to file the Amended Form 941-X with the IRS on our client’s behalf.
But that’s the extent of it.
In fact, most wise Payroll Services are asking clients to sign an indemnification waiver before submitting a Form 941-X because the Payroll Service can take no responsibility for the accuracy of the ERTC credits you are claiming.
For them to involve themselves in the intricacies of this calculation, it is a liability and beyond their scope of services.
Whether your tax accountant is a CPA or EA, he or she most likely only prepares your Federal and State Income Tax Returns. However, ERTC credits are claimed against Employment Taxes on Form 941, and cash advanced through Form 7200.
The complexity of the ERTC program is a beast unto itself and every tax accountant we’ve talked to has said they focus on staying up-to-date on the ever-evolving income tax code, and they can’t now become experts in the ERTC program as well.
If your tax accountant is comfortable determining your eligibility by quarter and year, computing your credits, and preparing contemporaneous documentation to support an IRS audit, then you should certainly let them handle all of this.
If you want a second set of eyes on this, we’re happy to take a look.
Your Bookkeeper should certainly have access to all the information that is needed for an accurate calculation of your legal ERTC claim. They will have your financial reports, payroll registers, and PPP loan forgiveness documents.
The Million Dollar Question is... Do They Have The Time?
- Do they have the time to dig into the text of American Rescue Plan Act of 2021
- And its accompanying referenced laws like: CARES Act, Families First Act, Payroll & Healthcare Enhancement Act, PPP Payroll Flexibility Act and the Consolidated Appropriations Act.
- Time to read the IRS Interpretations and FAQ’s? And cross-reference those definitions with that of PPP which was separately defined and dissimilarly interpreted in the Small Business Administration’s Bulletins and IFRs?
- Do they have the time to ensure accuracy in eligibility determination, maximize your computation and create the supporting documentation you’ll need to support an IRS audit of employer taxes?
So far, we have not found a bookkeeper who is able to take all this on, while handling the day-to-day of bookkeeping. If yours can, then take them up on their offer. We’re happy to take a second look.