Employee Retention Credit is a fully refundable tax credit for eligible employers based on qualified wages.

It typically takes our Experts 1-2 weeks to process your payroll, reconcile any gap in PPP covered periods, and create the attribution schedules. After that, we will submit your paperwork to the IRS, who will process your tax credit and give you a cheque within 8 to 12 weeks.

Yes, but not for the same wages used for PPP forgiveness.

The gross receipts of the calendar quarters from 2020 and 2021 (during covid) are compared to the corresponding quarters of 2019 (the benchmark). The threshold to meet a significant decline in gross receipts vary for the calendar quarters depending on the year in question. To meet the significant decline in gross receipts:

For calendar quarters in 2020, gross receipts must have declined over 50% to corresponding quarters in 2019.

For calendar quarters in 2021, gross receipts must have declined over 20% to corresponding quarters in 2019.

Qualified wages depend on the classification of the employer, either a (1) small employer or (2) large employer, based on the number of employees in 2019. The threshold that determines the size of the employer is different for 2020 (100+ employees) and 2021 (500+ employees).

If a small employer, the credit is available to all wages, including part-time.

If a large employer, the credit is limited only to the 2019 full-time employees who were retained and were not providing services through the quarters.

Eligible Employers are those that carry a business during calendar year 2020 and/or 2021, that either experienced: (1) a significant decline in gross receipts during the calendar quarter or (2) fully or partially suspended operations during any calendar quarter due to a government order.

For qualifying organizations, the program kicked off on March 13th, 2020, and runs through September 30th, 2021.

After this year's December 31st, into 2022 and 2023, you may submit a refund application for 2020 and 2021. And perhaps even beyond that.

Others qualified to continue getting ERC in every payroll they handle through September 30, 2021, at around 30% of their payroll cost, in addition to refunds. We have clients who have solely gotten refunds.

No, wages paid to related individuals are not considered for ERC.

Per the Infrastructure Investment and Jobs Act, the ERC ends early, making wages paid after September 30, 20201, ineligible for the credit (except for wages paid by an eligible recovery startup business).

Statement on Standards for Tax Services No. 1, tax return positions, provides guidance indicating that when preparing and signing a tax return, the member must conclude there is a reasonable basis for the position. The member must not recommend a position that exploits the audit selection process of a taxing authority. If a third party has prepared an ERC claim where the member does not believe there is a reasonable basis for the claim (e.g., the ERC eligibility criteria is based on partial suspension of operation, but without a government order), then the member should determine whether he or she should sign the tax return that reflects the salary adjustment or disclose the tax return position on the return.

No. If the eligible employer does not meet the eligibility under the gross receipts test, then the employer must experience a full or partial suspension of operations due to a government order. Whether an employer experienced a partial suspension is a facts and circumstances determination and will vary depending on the location of the business and the government orders in place. 

Employer is permitted to use alternate quarter to calculate gross receipts. For more information, please contact us.

All entities that are treated as a single employer are considered one employer for purposes of ERC. Under Sec.52, aggregation rules apply to partnerships, trusts, or sole prop in businesses under common control (parent-subsidiary, brother-sister controlled group, affiliated service group)

Yes, but not for the same wages.

Yes. Any tribal government or tribal entity that carries on a trade or business may be an Eligible Employer for purposes of the Employee Retention Credit, if it otherwise meets the requirements for the credit.

Yes, organizations described in section 501(c) of the Internal Revenue Code, and exempt from tax under section 501(a) of the Code, may be Eligible Employers for purposes of the ERC if they are employers that otherwise meet the requirements to be eligible for the credit.

Only wages paid to employees, but not with respect to own self-employment earnings.

Yes

Yes.

May claim ERC for wages paid after March 12th, 2020, thru March 13st, 2020.

For 2020, the ERC equals 50% of the qualified wages paid in a calendar quarter. The maximum amount of qualified wages considered to each employee is $10,000 for the year, so the maximum credit for qualified wages paid to any employee is $5,000 for the year.

For 2021, the ERC equals 70% of the qualified wages paid in a calendar quarter. The maximum amount of qualified wages considered to each employee is $10,000 per calendar quarter, so the maximum credit for qualified wages paid to any employee is $7,000 per calendar quarter.

The operation of a trade or business is partially suspended if an appropriate governmental authority imposes restrictions on the employer’s operations by limiting commerce, travel, or group meetings (for commercial, social, religious, or other purposes) due to COVID-19 such that the employer can still continue some, but not all of its typical operations.

Not eligible, however may be eligible if it experiences a significant decline in gross receipts.