Employee Retention Tax Credit.
One of the last stimulus relief programs under the 2021 American Rescue and 2020 Cares Act is available for businesses and organizations that retained W2 employees during the pandemic. It's the Employee Retention Tax Credit (ERTC) which provides up to $26,000 per W2 employee PT/FT.
Tax Credit Qualifications
Only Need ONE from below
Partial or Full business closure (Shutdowns ordered by government body)
100 or fewer employees in 2020
500 or fewer employees in 2021
Gross receipts decreased more than 50% in 2020
Gross Receipts decreased more than 20% in 2021
Supply chain issues (could not get supplies or products) 10% impact on business
Our Mission at Collective Impact is to help small and underrepresented nonprofit organizations access resources to maximize impact. We partnered with ERC Specialists to get our community approved for unrestricted funds from this stimulus program created by the 2021 American Rescue Plan and 2020 Cares Act. We're excited to help you qualify.
If your organization was impacted by any of the above listed Fill out the form to get started.-->
Do I have to repay the ERC Credit?
No. This is not a loan. It's a refundable tax credit. When we file your ERC claim we request a refund check for you.
How much do you charge?
Our service charge is based on a percentage of the credit recovered. We calculate and provide our fee with our free analysis. Since we are typically able to recover 10-20% more than someone less familiar with the program, our fee is very affordable. Just like a good CPA, using the right team for this process pays for itself.
Can't I just have my CPA file? Why would I use ERC Specialists?
Of course. The challenge is the ERC credit is taken on your payroll returns and not through your business income tax returns, which is what most CPA's handle. Because of this most CPA's don't process this credit, unless they process your payroll in house. This is also a big reason why this credit is so underutilized. Since CPA's don't typically handle it and they are the tax experts, it has mostly fallen in a middle ground where few are able to effectively process the credit. Interestingly, we receive a large portion of our clients from CPA's.
At ERC Specialists we have decades of payroll experience, which has allowed us to specifically focus to understanding and maximizing the ERC program. In our experience we have found that due to the complexity (the ERC tax code is over 200 pages) and time investment necessary to understand the ERC program, very few are able to effectively maximize this sizeable credit for your business.
Can I get ERC Funds if I already took the PPP?
Yes. The Taxpayer Certainty and Disaster Tax Relief Act of 2020, enacted December 27, 2020, modified the ERC credit rules. One of the modifications included allowing a company to have a PPP loan and still take advantage of the ERC credit. However, you can't use the same dollar-for-dollar funds. We take this into account when processing your ERC credit.
My revenue went up in 2020, can I still qualify for the ERC program?
Yes! There are two possible qualifications for 2020: revenue reduction, or a "full or partial shutdown of your business due to COVID-19". Specifically, the IRS describes this as "A government authority required partial or full shutdown of your business during 2020 or 2021. This includes your operations being limited by commerce, inability to travel, or restrictions of group meetings." Below are several examples of qualifying events:
Example 1: A restaurant must close or limit its on-site dining. Such as having to close down every other table, due to COVID-19 restrictions.
Example 2: A business with a planned event has to cancel that event, or restrict the amount of people who can attend due to COVID-19 restrictions.
Will the ERC funds run out?
This is not a lending program - tax refunds are issued by the US Treasury. Therefore, all eligible employers will receive the funds.
I'm getting more in ERC Credit than I paid in taxes?
Remember that this program is taken according to payroll taxes paid, not on income taxes. ERC funds not applied towards owed payroll taxes are treated as an 'over deposit' of taxes that will be requested as a refund check from the IRS.
As an owner do my wages, or the wages of any family member I employ qualify?
Maybe. Wages of owners who have majority ownership, defined as over 50%, do not qualify, nor do the W2 wages of any immediate family members of the owner. In the case an owner has less than 50% ownership, their W2 wages qualify, as do the W2 wages paid to immediate family members.
Can I qualify for the ERC if I'm self employed?
No, if you are the majority owner (over 50%) of your company then your wages do not qualify.
How long does it take to get my ERC Credit?
This is how the process works: you send us the required documents and we process analysis at no charge. The process from start to finish usually happens in 2-3 weeks. If you wish to move forward, you will select your desired payment option and we file your claim. Once filed, refunds are released based on IRS backlog. Currently, the IRS has stipulated a 20-week minimum turnaround on the ERC refunds.
Is the ERC Credit taxable?
The ERC credit is not considered income for federal income tax purposes, but you must reduce any deductible wage expenses by the amount of the credit. Please provide the credit information to your CPA for tax purposes.