The Employee Retention Credit (ERC) is a tax credit available to eligible employers that helps to retain their employees amidst the COVID-19 pandemic. However, many businesses are unaware of this tax credit and the reputable companies that can assist them in analyzing their eligibility without charging a percentage of their refund.

The COVID-19 pandemic has had a significant impact on the global economy, and many businesses are struggling to stay afloat. The Employee Retention Credit (ERC) is a tax credit that was introduced by the US government to help businesses keep their employees employed during these difficult times. The ERC provides eligible employers with a refundable tax credit of up to $5,000 per employee for wages paid between March 13, 2020, and December 31, 2021.

While this tax credit can be a lifeline for businesses, many are unaware of its existence or how to claim it. Additionally, some businesses are uncertain about the eligibility criteria and how to calculate the credit. To ensure that businesses are not leaving money on the table, it is essential to have their ERC analysis performed by a reputable company that will not charge a percentage of their refund.

 

Understanding the Employee Retention Credit (ERC)

The ERC is a refundable tax credit that was introduced by the US government as part of the CARES Act. The credit is designed to help eligible employers retain their employees by providing them with a refundable tax credit of up to $5,000 per employee. To be eligible for the ERC, a business must meet certain criteria, including:

 

  • The business must have been fully or partially suspended due to government orders related to COVID-19 or have experienced a significant decline in gross receipts.
  • The business must have fewer than 500 full-time employees.
  • The business must have paid qualified wages to its employees between March 13, 2020, and December 31, 2021.

 

Qualified wages are wages paid to employees that meet certain criteria, including:

 

  • The wages must have been paid between March 13, 2020, and December 31, 2021.
  • The wages must have been paid to employees who were not working due to a full or partial suspension of operations or a significant decline in gross receipts.
  • The wages must have been paid to employees who were not receiving the Paid Sick Leave Credit or the Family Leave Credit.

 

How to Claim the Employee Retention Credit (ERC)

To claim the ERC, eligible employers must file Form 941, Employer’s Quarterly Federal Tax Return, with the IRS. The credit is claimed on Line 11c of Form 941, and any excess credit can be refunded to the employer.

It is important to note that claiming the ERC can be complex, and eligible employers may need the assistance of a reputable company to analyze their eligibility and calculate the credit. However, many companies offering this service charge a percentage of the employer’s refund, which can be costly.

 

How to Ensure Analysis is Performed by a Reputable Company

To ensure that analysis is performed by a reputable company it is essential to do your research. Look for companies that have experience in ERC analysis and have a proven track record of helping businesses claim the credit. Additionally, ask for references and read reviews to ensure that the company you choose has a good reputation.

It is also important to ask about the company’s fee structure before engaging their services. Reputable companies will charge a flat fee for their ERC analysis services and will not charge a percentage of your refund. This ensures that the employer can keep more of the credit they are entitled to, which can be a significant amount of money for some businesses.

Another way to ensure that analysis is performed by a reputable company without being charged a percentage of your refund is to work with a CPA or tax professional who has experience with the ERC. These professionals can help analyze your eligibility for the credit and calculate the amount you are entitled to without charging a percentage of your refund.

Finally, it is important to act quickly as the deadline for claiming the ERC is fast approaching. Eligible employers must file Form 941 to claim the credit by the applicable deadline, which is generally the last day of the calendar quarter following the quarter in which the qualified wages were paid. For example, for qualified wages paid in the first quarter of 2021, the deadline to claim the ERC is April 30, 2021.

The Employee Retention Credit (ERC) is a valuable tax credit that can help eligible employers retain their employees during the COVID-19 pandemic. However, many businesses are unaware of its existence or how to claim it. To ensure that businesses are not leaving money on the table, it is essential to have their ERC analysis performed by a reputable company or a tax professional without being charged a percentage of their refund. By doing so, businesses can keep more of the credit they are entitled to, which can be a significant amount of money during these challenging times. Act fast and file your claim before the deadline to take advantage of this beneficial tax credit. Consider partnering with Westwood Public Accounting today to take your business to the next level. Contact us today at +1 602-835-2545.