Experienced a significant decline in gross receipts during the 2021 calendar quarter, more than a 20% decline versus the same quarter of 2019, and a 50% decline in the 2020 calendar.
WHAT IS THE ERC?
The Employee Retention Credit
Learn more about the payroll tax refund that helps eligible businesses receive up to $26,000 per employee kept on payroll during the pandemic.
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As a small to medium-sized business, it’s likely that you were negatively impacted by COVID-19, and you certainly weren’t alone.
Due to financial suffering across the country, Congress passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act to help get businesses back on their feet — with a special section called the Employee Retention Credit (ERC).
The ERC explained
The Employee Retention Credit (ERC) was developed to encourage and support employers who retained existing employees throughout 2020 and for the first three quarters of 2021 by offering a generous payroll tax refund through the IRS.
Eligible businesses can receive a refund of up to $5,000 per employee for all of 2020 and up to $7,000 per employee kept on the payroll for each quarter for Q1 through Q3 of 2021. That’s a total refund of up to $26,000 per employee kept on your payroll.
Designed to reward businesses
The program rewards those who kept employees on payroll in 2020 and 2021.
The ERC wasn’t widely used until recently
The ERC has since undergone expansions and multiple amendments by Congress.
Capital for any business need
The ERC refunds are most often received as a check from the US Treasury.
Established by the CARES Act
The same relief bill that created PPP loans also created the ERC.
The ERC is underutilized, with most eligible businesses not yet claiming their refund.
The Employee Retention Credit is available to employers of any size, including tax-exempt organizations. It also may be available to tribes, if they operate a trade or business.
IRS Website
The Internal Revenue Service urges employers to take advantage of the newly-extended employee retention credit...
IRS Website
Is my business eligible for the ERC?
Thousands of small and medium-sized businesses will qualify. Unfortunately, many business owners are missing out on a valuable opportunity by being misinformed or relying on outdated information.
At Innovation Refunds, we understand that fully comprehending the ERC can be a complicated and confusing process. ERC qualifications and limitations have been amended by Congress several times since the initial rollout of the Employee Retention Credit.
Additionally, since the ERC is related to your payroll, not your business income tax returns, it requires a series of payroll tax filings that many CPAs may be unfamiliar with or not completely confident in using. That is why we recommend working with a account executive who can provide you with updated information and help your business get the full amount that it’s eligible to receive.
Eligibility Requirements
1
You must be a “small business”
The government has defined a “small business” as:
Any employer that operates a trade, business, or a tax-exempt organization.
This was expanded for the ERC 2021 to include some governmental employers.
Having fewer than 100
full-time employees
(calculated from 2019) for the 2020 ERC refund.
Having fewer than 500
full-time employees
(calculated from 2019) for the 2021 ERC refund.
2
Your small business may be eligible for the ERC if it meets either of the following criteria:
A
OR
B
Had operations that were impacted by government orders due to COVID-19, resulting in limitations of commerce, travel or meetings.
If your business was impacted due to a government order that caused one or more of the following, you may qualify:
- Your business operations were interrupted.
- There were interruptions with your supply chain.
- There was an inability to access equipment.
- Your business had a limited capacity to operate.
- You were unable to work with your vendors.
- Your hours of operation were reduced.
- Your available services offered to customers were limited or reduced.
Even if your business and your tax advisor looked into the ERC before, we urge you to review it again.
Start My Free ReviewRead the IRS DocumentationHow much is my business eligible to receive?
Determining the exact amount that your business may qualify for is a complex accounting process. Though these are payroll tax credits, what your business paid in payroll tax isn’t the only factor in any ERC calculation.
Estimate Potential Refund
Claim Your RefundCheck what your business may be eligible to receive, with no upfront costs
Your refund amount is based on many factors, including:
Qualifying quarters
Number of employees
Hours worked
Participation in other government programs
PPP loans
Group health premiums
Wages paid
How do I file?
Once you find out if your business qualifies, you’ll need to fill out the specific tax forms for 2020 and the applicable quarters of 2021.
Getting the refund generally takes several months. This is why it’s important to make sure that your forms are filled out without error. Incomplete or incorrectly filled out forms will be rejected, and may result in your business having to re-file.
Time is running out!
The maximum value a business is able to claim starts to decrease in 2024 and gets smaller each quarter.
Qualifications and limitations have been amended multiple times, so don’t let your business miss its chance to make a claim. As more small businesses discover the ERC, the processing times may increase.
Get started today.
We recommend working with professionals who focus on ERC.
Getting your amended payroll tax returns prepared and filed by inexperienced providers could result in a reduced tax refund, rejected amended payroll tax returns, or the need to revise and refile your amended payroll tax returns, prolonging the process. Your tax provider needs to be up to date on all ERC-related legislation, so they may maximize the available ERC and avoid mistakes that could cost your business part (or even all) of the ERC tax refund.
Talk to a Specialist
How can Innovation Refunds help?
ERC is what we do. We work with a team of independent tax attorneys and tax professionals who have overseen thousands of claims, processing over $5 billion in ERC refunds for our clients.
Our streamlined end-to-end filing process simplifies the complex claims process. And we’re there to support you through the whole process, from eligibility to claiming and receiving funds.
File with confidence
Unlock every credit
Our network of independent tax attorneys and tax professionals aim to maximize your business' ERC refund.
Professionals at your fingertips
Our team is here to guide you every step of the way.
Filing made easy
With 100+ payroll system integrations, finding the right documents is fast.
No hidden fees
We only collect a fee when your business gets its refund.
