The Employee Retention Credit, or ERC, offers qualifying employers a significant tax benefit for wages paid to employees in 2020 and 2021. Refunds up to $26,000 per employee are available to businesses that meet certain criteria. We encourage businesses to take advantage of this program before their eligibility expires.
Congress designed the ERC program to encourage employers to keep employees on payroll through the COVID-19 pandemic’s economic disruptions. The ERC was introduced in the 2020 Cares Act and was later modified by the 2021 Relief Act.
How large is the Employee Retention Credit refund?
The size of a business’s potential ERC refund varies by the quarter in which qualifying wages were paid:
A business that qualified during every covered period may be eligible for up to $26,000 per employee.
How does a business qualify for the Employee Retention Credit?
The ERC is available to all qualifying businesses regardless of location or industry. To qualify, a business must have 500 employees or less and must have paid wages during 2020 or 2021. Businesses can qualify even if they received PPP funds that were forgiven. There are various ways that a business may qualify for the ERC program. Each quarter is qualified separately and may use different qualification criteria from those used for other quarters.
A business qualifies for the ERC if it experienced a significant decline in gross receipts during the covered period, defined as follows:
Businesses also may qualify for the ERC if they experienced a full or partial suspension of the operation of their trade or business during any calendar quarter due to governmental orders limiting commerce, travel or group meetings due to COVID-19. We review the federal, state and local government orders to assist in qualifying your business.
The credit is also available to businesses that experienced a supply chain disruption caused by a governmental order affecting a domestic supplier that caused the supplier to suspend or delay shipments.
How does a business apply for the Employee Retention Credit in 2022?
To apply for the ERC a business must analyze its qualifications quarter-by-quarter and submit amended payroll tax filings to the IRS. At Ferguson Timar we follow these steps:
How much does it cost to apply for the Employee Retention Credit?
Our fees vary according to the complexity of the filing, based on the number of quarters and employees in the qualifying period. Our fee is paid only upon receipt of the ERC refunds.
Recapture your Employee Retention Credit today.
To get started with your ERC refund application, call Ferguson Timar at (714) 204-0100.
