What is the ERC?The Employee Retention Credit (ERC) is a refundable tax credit designed to encourage businesses to keep employees on their payroll during the COVID-19 pandemic.
How much is the ERC worth?The ERC can be worth up to $26,000 per employee, depending on the eligible quarters and the number of employees retained.
Who is eligible for the ERC?Businesses that experienced a significant decline in gross receipts or were fully or partially suspended due to a government order may be eligible for the ERC.
Is ERC available for 1099 contractors?Regrettably, this program is exclusively available for businesses that have provided W2 wages to non-owners.
Can businesses claim the ERC if they received a PPP loan?Yes, businesses that received a PPP loan can still claim the ERC, but not for the same wages used to qualify for forgiveness under the PPP.
How do businesses claim the ERC?Businesses can claim the ERC by filing Form 941 for each quarter they qualify and claiming the credit on their payroll tax returns.
Our income has not decreased, are we still eligible? Yes!To be eligible for the Employee Retention Credit, you must have either experienced a fully or partially suspended operation due to COVID-19 orders from a governmental authority OR a significant decline in gross receipts (at least 20% reduction compared to the same quarter in 2019). A decrease in income alone does not determine eligibility.
What if I already filed my taxes for the year I am applying for ERC?You can file an amended tax return to claim the ERC credit.
What documentation is required to claim the ERC? Businesses must keep documentation to support their claim for the ERC, including records of gross receipts, government orders, and employee retention.
Is the ERC a loan that needs to be repaid?No! The ERC program is not a loan and does not need to be repaid. It is a tax credit that can be applied to payroll taxes owed to the IRS.