17 Oct 2022 How to Get Employee Retention Credits (ERC)
Did you know that Employee Retention Credits (ERC) from the Cares Act are still available for many businesses filing taxes? The ERC benefit can be significant: up to $5,000 per employee per year in 2020 and $7,000 per employee per quarter in 2021. ERC credits apply to both small and medium-sized businesses.
At the Haynie & Company accounting firm, our team has helped clients secure millions in Employee Retention Credits, and we’d like to pass our knowledge on to you. Here are some of the frequently asked questions we hear from small business owners we help:
Do I Qualify for ERC?
We serve thousands of businesses each year. One of the main issues we see in financial records is that some businesses saw a year-over-year increase in cash flow, so the business owners assumed they would not qualify for any Employee Retention Credits. But the “partial shutdown” rules can still create eligibility depending on the circumstances of on-site customer restrictions or limits on the operating procedures. For example, if you ask most small business owners, their business was theoretically not able to grow as fast as it would have were it not directly impacted by COVID-19 restrictions and mandates.
In addition, the decline in revenue is not calculated year-over-year. For 2020, you determine a decline in revenue by comparing the 2020 quarter to the same quarter of 2019. For 2021, you determine a decline in revenue if there was a reduction of greater than 20% when compared to a similar quarter of 2019.
What Is The Timeline To Apply for ERC?
At this point, the window for claiming timely filed ERC amounts has closed, but we have 3 years to amend. While that is a long time, the delays in processing keep growing. With delays of 7-month or possibly longer, we strongly recommend that you file as soon as possible. The delay in processing would be an administrative inconvenience and it would limit the time you have to submit an amended claim or an appeal if the original filing is not accepted.
What If I Already Got PPP?
Some clients have mentioned they thought PPP or other state grants excluded them from ERC entirely. There is some confusion around the relationship between PPP and ERC. You can’t “double-dip” and claim ERC on wages paid with PPP dollars. Nevertheless, our experts understand how PPP and ERC can best work together. It can get complicated. It is best to discuss your situation with our experts and come to the correct conclusions about which wages qualify for each program.
At Haynie & Company, we’re passionate about saving and managing money. Let us help you prepare with tax planning and tax preparation for small businesses. See your business flourish with detailed monthly financial reports and advice from a personal financial advisor. Contact us now to get started, and take the stress out of filing your tax returns this year!
Need to Review Your Financial Statements? Get A Free Consultation from Certified Public Accountants
Not everyone qualifies for ERC. You need an expert to evaluate your business taxes, take a holistic look at your workforce, and quickly identify if ERC applies to you. Our experts not only take care of the paperwork but also optimize your credit.
Consultations are free and you only pay if you qualify. We do not bill until we have completed the project and filed the forms by certified mail. You will only pay a percentage of the ERC credit you receive. Learn more about how we can help and explore our bookkeeping services and payroll services today!
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