What is the Employee Retention Credit (ERC)?
The Employee Retention Tax Credit (ERC) is a refundable payroll tax credit created by the Coronavirus Aid, Relief, and Economic Security (CARES) Act. The Employee Retention Credit allows small and medium business owners to receive a tax break for employees they were able to keep on staff during the Coronavirus pandemic.
Can I get ERC if I already took out a PPP loan?
Yes, you can qualify for the Employee Retention Program (ERC) if you’ve already received a loan under the Paycheck Protection Program (PPP). You may also be eligible for ERC if you did not take out a PPP loan. ERC is not a loan, but rather returns a portion of the payroll taxes your business already paid.
Do I have to pay this money back?
No, this is not a loan. It's a refundable payroll tax credit for your business, and can be used however you’d like.
What is the qualification criteria for ERC?
The IRS estimates that 70-80% of small and medium size businesses qualify. To be eligible for ERC, your business must fall into one of the following categories:
A disruption in business operations beginning after February 15, 2020 and continued due to the coronavirus pandemic, including businesses that are fully or partially suspended by government orders or are unable to operate at normal capacity due to the pandemic.
OR
A decline in revenue. Your eligibility is largely based on your 2019 records. Your business must have 500 or fewer employees in 2019 to qualify and your company’s quarterly gross receipts in 2020 and 2021 must be at least 20% lower than the corresponding quarter in 2019.
How much does this cost?
There are no up-front fees to receive your refund. The initial analysis to determine your eligibility and approximate refund credit is free. If you file for an ERC with Priority Concepts, our fee is a percentage of the credit you’ll receive from the IRS to cover the costs associated with qualifying, calculating, and preparation of your claims by a professional CPA or tax attorney.
Why can’t my CPA do this for me?
There are over 70,000 pages of tax code; it’s impossible to be an expert on all of them. ERC is all we do. It’s like the difference between your family doctor and a neurologist. By concentrating on this one program, our strategic partners understand the intricacies and nuances involved in determining your eligibility and accurately calculating your refunds.
Is there a deadline to apply for this ERC credit?
There is a limited amount of time to apply for this credit. We recommend taking advantage of this tax credit immediately.
Can a profitable or essential business still qualify?
Yes, essential businesses can qualify, and a decline in revenue is not required to receive ERC.
How long does it take to get an ERC refund?
You can expect reimbursement between 5 to 10 months after we receive and file your documents.
How is the refund calculated?
Calculating the employee retention credit can be complicated, but that is what Priority Concepts is here for.
Businesses are eligible to claim credit for both the years 2020 and 2021. In 2020, the credit was increased to 50% of eligible employees paid in a year after March 12, 2020, and before January 1, 2021. Any employers with a maximum of $10,000 wages were eligible.
Similarly, for 2021, the retention credit is capped at 70 % of qualified employers from January 1, 2021, to December 31, 2021. However, the maximum credit is allowed up to $10,000 a credit. So an employer can claim a total credit of $28,000 for the year 2021.
How do I check on the status of my ERC refund?
To check the status of your refund, you can call us at 888-536-1330.
Do you have a referral program?
At Priority Concepts, we want to help as many businesses as possible. To do that, we’re building a network of referral partners. Contact us at 888-536-1330 for more information.
