How To Know If You Qualify for Employee Retention Credit

If you retained employees through COVID shutdowns, your business could be eligible for a tax refund of up to $26k per employee for tax years 2020 and 2021. Not only is it still not too late to apply, but the credit is a refundable credit meaning even if your business is reporting a loss the business will receive a check for their qualified credit.

Most Common Misconceptions 

1. If I receive a PPP, I’m ineligible for ERC. 

2. My gross receipts did not drop by 20% or my business has grown during the pandemic. 

Both of the statements above are not true and there are alternate ways to qualify for ERC. 

Alternative Ways You May Still Qualify For The ERC 

1. A partial shutdown by federal, state or local government for you, your vendors or clients

2. A disruption in your business due to limited capacity, equipment access, supply chain delays, reduction in services hours and offerings. 

It may seem like everyone may qualify, but be wary of tax companies making strong claims that they can get you thousands of dollars in minutes. The credit requires proper understanding, calculation and documentation, so you don’t find yourself in trouble down the road. 

Remember the business owner is liable with the burden of proof that you meet the qualifications under the IRS, not the tax professional. Make sure you are properly documenting how your company qualifies for the credit in advance of filing and hire a trusted tax advisor.

Do you feel like your business may meet the qualifications to qualify for the ERC? Call us today, we are happy to help.