Does your business qualify for the Employee Retention Credit?

The Employee Retention Credit (ERC) is a refundable tax credit created under the terms of the CARES Act that rewards employers with up to $26,000 for every employee retained during the Coronavirus pandemic. The ERC program is part of the greater pandemic relief fund that helps provide financial support for struggling business owners following the outbreak of Covid-19.

To qualify for the Employee Retention Credit under the CARES Act, businesses were required to meet one of the following conditions: Experienced a full or partial suspension of business operations due to a government order. Suffered a decline in revenue of in 2020 and/or in 2021, when compared to the same quarter in 2019.

Unfortunately, self-employed freelancers and the owners of LLCs do not qualify as full-time employees for receiving a Social Security benefit. That said, if your company is structured as an S-Corp or C-Corp, you may become eligible if you are on the payroll.

When dealing with the government, it is hard to put an exact number on processing times. As of 2023, the IRS refund timeline averages between 4-6 months. (certain refunds can take up to 12 months) Some clients receive partial payments paid out quarterly, while others receive a lump sum payment. Every situation is different. We know that time is literally money, so we take every step and precaution to decrease processing times.

Yes, qualifying for the Employee Retention Credit (ERC) is possible even if you have already received a Paycheck Protection Program (PPP) loan. The CARES Act initially did not allow businesses to claim the ERC and PPP loan, but recent stimulus legislation has made it possible for businesses to benefit from both programs. Under the CAA, businesses that have obtained PPP loans are now qualified for the credit if they meet one of the following: Having operations that were fully or completely shut down or partially suspended due to a COVID-19-related government mandate. Showing a decline in total income where any calendar quarter in 2021 has total income which is less than 80% of the total income for the same calendar quarter in 2019. Furthermore, for the 2021 ERC only, employers can determine their eligibility by comparing their total income from the preceding calendar quarter to the corresponding quarter in 2019. For example, an employer could determine eligibility for the first quarter of 2021 by comparing its total income for the fourth quarter of 2020 to the fourth quarter of 2019.

Yes, nonprofit organizations are also eligible for the Employee Retention Credit. This includes organizations such as hospitals, schools, museums, performing arts centers, and churches, among others, as long as they meet the eligibility requirements for the credit.

For businesses with payroll W2 staff members, regardless of if they are delivering services during the allotted period, are taken into account for qualification.

Yes, eligible employers can elect to apply the Employee Retention Credit (ERC) to the employer portion of their payroll taxes. This is done by reducing the payroll taxes deposited with the IRS. The credit can be applied to the employer's share of Social Security taxes up to the amount of the credit. This can help the employer with cash flow and can be applied to the deposit and/or payment of taxes.

At OnPoint ERC, we understand the importance of maximizing your credits and minimizing your audit risk regarding the Employee Retention Credit. Our team and partners can help navigate the technical rules to ensure that you take full advantage of the credits available, even if you've been told NO by others.

There's zero commitment to pay for our refund analysis before getting started. Once we begin recovering your business refunds, our charge is % of your return amount, with no hidden fees. Basically, you get legal and accounting counsel at your beck-and-call and you don't pay a dime until the government pays you. If no payments from Uncle Same, no payment to us!

The ERC program puts money back into the pockets of business owners without the need to pay anything back. ERC is NOT a loan. This is the government's way of saying "thanks for keeping the economy moving during Covid's toughest years."