Employee Retention Credit

Does My Business Qualify for the
Employee Retention Credit?

The Employee Retention Credit (ERC) is exactly what it sounds like!  Business owners, both large and small, are being rewarded for their efforts to keep employees on payroll during the pandemic. Congress recently passed a $1.9 trillion COVID-relief bill to streamline this recovery, and the Employee Retention Credit is one of the most lucrative opportunities business owners should take advantage of as we work towards our future and leave this pandemic behind us.

Below you will find additional information to better understand the ERC how to

How to Qualify

The ERC has gone through significant updates, so even if you and your advisor have reviewed this before, we encourage you to take another look with one of our credit specialists to uncover all qualifying activities and wages that will maximize your benefit and/or refund. Unfortunately, the program is not yet living up to its full potential because many business owners are prematurely disqualifying themselves due to misinformation and rumors about who does or doesn’t qualify.

The overarching theme for businesses to focus on is how the coronavirus pandemic impacted our economy as a whole…so even if your business grew or was deemed an essential business during the pandemic, there are more qualifying factors to look at before you disqualify yourself.

This payroll tax credit is available to essential and non-essential businesses in any industry who endured the effects of the pandemic. Government-mandated shutdowns—on federal, state, and local levels—are a major factor that many business owners had to adapt to over the last year. For example, a restaurant that could not let customers dine indoors or a manufacturer that had to slow their operations due to new health and safety restrictions are a couple of examples that business owners present to us every day.

Here are some impacts to consider that qualify your business for the Employee Retention Credit:

• Full shutdowns
• Partial shutdowns
• Interrupted operations
• Supply chain interruptions
• Inability to access equipment
• Limited capacity to operate
• Inability to work with your vendors
• Reduction in services or goods offered to your customers
• Cut down in your hours of operation
• Shifting hours to increase sanitation of your facility
• Decrease in revenue in 2020 or 2021 compared to 2019

Estimate Your Credits and Eliminate Payroll Tax
Before the Deadline to Claim

You qualify for THOUSANDS in stimulus relief if your business was impacted by COVID due to government-mandated shutdowns, reduced hours, social distancing, and many other factors.

The New and Improved COVID-Relief Bill

Originally introduced in the CARES Act, the employee retention credit gained traction but was not as accessible to business owners as it is today. Restrictions around PPP, employee counts, and revenue constraints made it difficult to reach all the businesses who were entitled to the ERC benefit. Congress quickly realized that they were not reaching enough businesses with the 2020 version of the ERC, so they addressed these issues with the passage of the Consolidated Appropriations Act of 2021 (CAA).

Consolidated Appropriations Act of 2021

In response to the rapid effects of the pandemic on our economy, the CAA was revamped in 2021. This was officially approved and signed by President Biden on March 11, extending deadlines and eligibility requirements for the Employee Retention Credit and other incentives. Another exciting update is the fact that businesses can now claim the ERC alongside PPP and other paycheck protection programs. Even if you already claimed PPP and got your loan forgiven, you still qualify for this credit!

Small and medium-sized businesses make up over 99% of all U.S. businesses in the U.S.  In 2021, the new COVID-relief bill expanded the guidelines to help more businesses qualify. Even if your business had losses or do not have tax liability, your business can still qualify and benefit by receiving a substantial refund equal to each and every dollar above your company’s tax liability.

Value of the Employee Retention Credit

The Employee Retention Credit was revamped in 2021 to reach more businesses and help more Americans stay employed. This is achieved by providing a refundable credit to offset or potentially eliminate payroll tax for business owners who were impacted by the pandemic. This is currently one of the largest credits available to business owners, delivering thousands of dollars in credits per employee with qualified wages.

A manufacturing company with an annual revenue of $20 million and 48 employees received a credit equal to approximately $336,000 in Q1 of 2021.

A few of their qualifying factors:

• 32% dropin quarterly revenue
• Numerous projects were canceled or delayed to COVID-related disruptions
• Delayed productiontimelines caused by supply chain disruptions

A small medical services company with an annual revenue of $500,000 and 17 employees received a credit equal to approximately $85,000 for the combined periods of 2020, Q1 and Q2 of 2021.

A few of their qualifying factors:

• 67% dropin 3Q 2020 revenue compared to 2019
• Continued decrease in revenue in Q4 2020, Q1 2021 and Q2 2021.

Get Thousands per Employee

Since Congress passed the latest relief bill, we’ve helped many businesses and their advisors reduce or eliminate payroll tax, and even receive a refund. The maximum credit for 2020 and 2021 is $33,000 per employee!  Our firm has experts with hands-on experience working in every industry. We will help you maximize your credit while minimizing risk. 

How to Apply for the Employee Retention Credit

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