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Employee Retention Credit Frequently Asked Questions

What is the Employment Retention Credit

The Employment Retention Credit (ERC) is a stimulus program designed to help those businesses that were able to retain their employees during the Covid-19 pandemic. It was established by the CARES Act and is a refundable tax credit and not a loan. The ERC is available to both small and mid-sized businesses. It is based on qualified wages and healthcare paid to employees.

Do I need to payback the ERC

No the ERC is a refundable tax credit, similar to a grant, and is not required to be paid back.

How can my business spend the ERC funding that is received?

Unlike the PPP that many businesses received already, there are not any restrictions on how businesses can utilize ERC funds.

Who qualifies for the Employment Retention Credit (ERC)

Employers that experienced partial shutdowns due to government orders limiting commerce, travel or group meetings; or that experienced significant declines in quarterly gross receipts (as compared to their quarterly gross receipts in 2019) due to the pandemic are eligible employers under this program.

What time period does the ERC Program cover

The program began on March 13th, 2020 and ends on September 30, 2021, for eligible employers.

The statute of limitations to apply for the 2020 ERC does not close until April 15, 2024. The statute of limitations to apply for the 2021 ERCs does not close until April 15, 2025.

Can I still apply for the ERC Funding

Good news! Yes, you can. Yes. The statute of limitations for the 2020 ERC does not close until April 15, 2024. The statute of limitations for the 2021 ERC does not close until April 15, 2025.

How much money can I get?

ERC is a refundable tax credit similar to a grant and can return up to $26,000/employee ($10,000 is the average for companies that received PPP, $20,000 is the average for businesses that didn’t)

I am an owner and I pay myself a W2. Do my wages count

Unfortunately, no. The IRS does not allow W2 wages from business owners to count, so if you are the only employee, you would not qualify to file. Other restrictions include immediate family members.

I am being told that I received PPP and therefore do not qualify for ERC. Is that true?

No that is not correct information. Businesses that received PPP can also receive ERC funding since the CARES Act was amended in 2021.

My business made more money from year to year and I did not see a decline of revenue. Do I still qualify?

Yes, If you had a change in business operations and answer yes to one of the following:

  • Change in business hours
  • Partial or full suspension
  • Reduction in services offered
  • Reduction in workforce
  • A disruption in your business (division or department closures)
  • Inability to visit a client’s job site
  • Additional spacing requirements due to social distancing
  • Change in job roles/functions
  • Tasks or work that couldn’t be done from home
  • Lack of Travel or Lack of Group Meetings

I have been told I do not qualify. Why should I try again?

Many have been told the same as at one time you would not of but based on the new updates, we are finding that 80% of the businesses that have been told they are not eligible, actually do when they speak to an expert. Isn't it worth 15 minutes of your time to see if you fall into that 80%?

Why would I not just use my CPA to do this or my payroll company?

Accountants specialize in taxes and payroll companies specialize in payroll. The ERC funding is a mix of both in some ways and entirely different in others. It is important that you utilize a company that specializes in ERC and understands the 200+ pages of the CARES Act and all the amendments made to it since its inception in 2020. Would you want a heart surgeon to do brain surgery on you or a brain surgeon? Each professional is good but one is much better for the purpose at hand. Same here.

How do I know this is not a scam?

The ERC tax credit is a legitimate tax credit as you can see on the IRS site.

These articles will provide additional background on recent developments with the ERC program:

We have partnered with the two top ERC companies, who have stellar reputations. It is important to work with a quality company that does not ask for any money upfront and knows how to file for the right way for your ERC funding.

What two companies have you partnered with?

We have partnered wit Bottom Line Concepts for businesses with five or more employees and ERC Specialists for those that have less than five employees.

Why did you choose these two partner companies

Bottom Line Concepts has been working saving businesses money for 14+ years and have worked with major corporate clients as well as small businesses in order to obtain the ERC funding for the business. They have currently submitted over 4 billion dollars worth of claims and have successfully worked with over 30,000 businesses for ERC.

ERC Specialists has a strong team and advisory board including former government employees, including AGs. They maintain top ERC compliance, and have filed over 20,000 successful ERC claims. They specialize in ERC and will work with any business as no matter how many employees that a business has.

How do I choose which partner company is best for my business

Overall, it is your choice, but we recommend any business that has more than five employees work with Bottom Line Concepts and any business that has less than five employees work with ERC Specialists. Both companies excel at what they do. Contact us if you want to discuss which one is right for you or if you have any other questions that did not get answered in this employee retention credit frequently asked questions section.

We do not like unanswered questions, so please contact us if we left you with any.

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