ERC is a payroll tax refund that incentivizes businesses to keep employees on their payroll. While the original COVID-19 relief bill only allowed companies to take either PPP or ERTC, a new credit version will enable businesses to claim both.
A qualified professional service can help you navigate this complicated process. They can evaluate your eligibility, collect all the necessary documents, and offer program expertise that a regular CPA or payroll processor might need to have.
The ERC is a refundable payroll tax credit established in the CARES Act. This credit is treated like a refund and can return up to $26,000 per retained employee.
The ERC can help businesses affected by the COVID-19 pandemic, and it is designed to encourage employers to keep their employees on during this difficult time. To qualify, your business must have significantly declined in gross receipts during either 2020 or 2021.
Additionally, you must have kept your employees on during the decline. The IRS defines a qualified reduction as having at least a 20% drop in gross receipts every quarter.
To determine if you are eligible for the ERC, contact a professional that specializes in tax credits. These experts will help you gather the necessary data, file Form 941-X (to amend returns), and calculate your maximum credit. They can even help you secure an advance ERC business loan to cover day-to-day expenses while you wait for your tax credit to arrive from the IRS.
Applying for the ERC is a complex process that requires careful attention to detail. The good news is that there are companies that can help you navigate the process and ensure that you receive all of the money that you’re eligible for. These companies can also help you avoid any potential pitfalls along the way.
The ERC is a refundable tax credit that business owners can claim for wages and health insurance costs they paid during the COVID-19 pandemic. The distinction is designed to reward businesses for retaining employees and maintaining operations despite government-mandated shutdowns and lockdowns.
To qualify for the ERC, you must meet two basic requirements: 1) you must have paid wages to W-2 employees during the pandemic, and 2) your gross receipts must have dropped significantly compared to previous quarters. You can submit Form 941-X to claim your refund if you meet these qualifications.
The CARES Act created the ERC, a refundable tax credit (not a loan) based on qualified wages and healthcare. To qualify for the ERC, your business must have been wholly or partially impacted by COVID-19 and demonstrate at least a 50% drop in gross receipts compared to similar quarters before the pandemic.
You also must retain employees during the affected quarters to qualify. In 2020, this meant at most three consecutive quarters of a decline in gross revenue, or the equivalent of four quarters. In 2021, this means a reduction in quarterly gross income of at least 50% compared to the same quarter in 2019. Businesses that received PPP loans under the Small Business Administration can still qualify for the ERC if they retain their employees. If your company has a valid ERC claim but needs to be able to confirm and disburse your refund before it takes six to nine months to a year for the IRS to establish and disburse your refund, you can apply for an ERC advance payment with OFS.
When it comes to the federal government, there isn’t a lot you can do to speed up the review process for your ERC claim. But you can work with an ERC business loan provider to get a cash infusion while you wait for your tax refund check from the IRS.
An ERC tax credit advance loan is a business loan that uses only the expected Employee Retention Credit as collateral. Most business owners who qualify for the credit can use this loan to cover their business expenses until they receive their refund from the IRS.
Getting started with an ERC advance loan is simple. Most companies begin by creating a profile to gather basic information about their business. Then they can connect with a funding specialist to determine what financing option is best for them. This step usually takes only a few days. Once the company has been approved, it can take as little as three days to close the loan and ten days for the funds to disburse.