The Employee Retention Tax Credit (ERTC) was created by the CARES Act in March 2020 to help businesses that have been negatively impacted by COVID-19.
It is a refundable tax credit that can be used to offset a portion of payroll taxes paid by employers.
This credit is available to all employers, regardless of size, and is designed to reward employers for retaining their employees during the pandemic.
As such, it's important for businesses to understand how the ERTC works and how they can take advantage of this benefit.
Let's take a closer look...
What Is ERTC Funding?
The Federal Government has recently amended the CARES Act, and it now makes more businesses eligible to collect the Employee Retention Tax Credit Funds that were originally offered to help businesses that were affected by and qualified for Covid-19 relief.
Because of the processing time involved for the ERTC program, most businesses choose to participate in the PPP program, because it got them funding quickly, whereas the ERTC Funding initially took at least 6 months to process and get paid on.
Even if you previously participated and collected funding under the PPP program, you probably now also qualify to receive additional funding under the ERTC program.
If you didn’t participate in the PPP program, then you possibly have an even bigger check with your name on it.
The ERTC program has been expanded to help more business owners retain their employees, and it pays you money for the W-2 employees that you employed and retained during the years 2020- 2021.
The qualification for each year is slightly different but depending upon what you paid out to W-2 employees in wages for both years, you could qualify to get back as much as $26,000 Per Employee.
And NO that is not a TYPO!
You could possibly receive as much as 70% of the wages you paid out, up to $10k per employee per quarters 1, 2 & 3 in 2021!
In most cases, we are talking about a nice big check coming to you as the business owner, so you should definitely follow through with this to see what your business can qualify for.
Most businesses were affected in one way or another by the negative effects Covid had on the economy, but the good news is that the government has made it much easier now to qualify for this ERTC Funding and because of recent changes, now more businesses can qualify.
The best thing about these FUNDS is that they never have to be paid back.
What business wouldn’t benefit from this program?
Those recent changes made to the ERTC Fund program make it easier to qualify for.
Why Most Businesses Haven't Heard About ERTC?
The reason that you probably haven’t heard about this yet is that the government hasn't publicized this information.
After being made aware of the changes to the ERTC, we decided to help get the word out and notify as many business owners as possible.
If you have W-2 Employees, whom you have paid wages in 2020 and/or 2021, then you probably qualify for ERTC Funding.
Even if you just started up your business during this time period, you probably also qualify for ERTC Funding too.
To qualify for the ERTC, an employer must meet one of two criteria:
1)) They have experienced either a full or partial suspension of operations due to a government order related to COVID-19 or...
2)) They have seen at least a 20% reduction in gross receipts compared to the same quarter in 2019. If an employer meets these requirements, they are eligible for both the 50% wage subsidy up to $10,000 per employee and the retained employee tax credit.
How Do I Apply For ERTC Tax Credits?
Unlike the Payroll Protection Program (administered by the Small Business Administration), there is actually no “application process” for the Employee Retention Tax Credits.
You simply claim the ERTC tax credit like you would any other tax credit – by asserting to the IRS that you can legally claim the credit.
When you claim a child tax credit, you do so by asserting this fact on your Form 1040 Personal Income Tax Return.
The difference is that when you claim an ERTC tax credit, you do so on your Form 941 Employer Quarterly Tax Filing.
For prior quarters, you must file an amended form (Form 941-X) to reduce your current quarter’s tax contribution and request a refund of excess credits (which is highly likely).
Another perk of ERTC is that since you can often estimate these credits in advance of distributing cash for payroll, you can file a Form 7200 to receive a cash advance to avoid waiting until the end of the quarter to apply for the refund.
Don’t dismiss and ignore this opportunity, because ERTC Funding is very real, and you most likely qualify for it and can use it right now in your business.
It takes about 1 minute to complete the simple 10-question Initial Inquiry Form that helps the expert ERTC Accounting Team assess whether your business qualifies or not.
If it does, then they will reach out to you to explain the whole process in more detail and request the other information you will need to provide.
Once you submit the information they need, they can turn around your application and get it filed with the IRS in about 2-4 weeks, and then the IRS will review the application and process your Funds, and send you your ERTC Check.
The knowledge you need to understand the requirements for filing and processing a qualified and approved application is complex and best left up to these experts, and that is why Sac Local Pros is highly recommending and arranging to connect you with these ERTC Accounting Experts.
Most CPAs don’t have the specialized knowledge or time to process these types of applications, but this is all this expert ERTC Team does, and they will be happy to work with your business accountant if needed, to obtain the necessary business paperwork to get your business it’s ERTC Funds.
The Employee Retention Tax Credit (ERTC) is a great option for businesses that have been struggling financially due to COVID-19.
It provides eligible employers with a refundable tax credit equal to 50% of qualified wages paid up to $10k per employee which can help them stay afloat despite difficult economic times.
To determine if you qualify for this benefit and how much you could receive through this program, it’s important that you consult with your financial advisor or accountant who can guide you through the application process and ensure you get maximum benefits out of this program!
Urgent Notice: The time period that businesses can receive credits for is 2020 - 2021. However, businesses have 3 years from the end of 2021 to file. If they qualify in 2020 and 2021 they need to file by 4/15/2024 to get both years. If they don’t then they can only file for 2021, and they have to do that by 4/15/2025.