The Employee Retention Tax Credit, also known as the ERC or ERTC, is an amazing tax credit that not enough business owners are taking advantage of. It’s available to most business owners that kept employees on their payroll during the worst of the COVID-19 pandemic, but many employers are not adequately maximizing the business savings that they could be with the help of the ERC program.

How the ERC Works

The ERC/ERTC was designed to help business owners by incentivizing them for keeping W2 staff on payroll during the pandemic, when many businesses had greatly reduced sales or services and some even had to shut down entirely. 

It was established by the Coronavirus Aid, Relief, and Economic Security Act, also known as the CARES Act, and is a refundable tax credit – in other words, it’s not a loan. You and your business do not have to pay it back. Sounds great, right? So why are so many businesses leaving this money on the table?

Qualifying for the ERC

Some business owners may simply not understand that they qualify to apply for the ERC. Others may not have the time to work out the details involved in applying for the credit, or they may be worried they will submit incorrect information or documentation in the course of trying to apply, and end up with a dreaded IRS audit.

Your business likely qualifies for the ERC if it operated during specific quarters in 2020 and 2021 and experienced either a full or partial suspension of operations as a result of a governmental order limiting certain operations. Or, if your business experienced a substantial decline in gross receipts as compared to the same quarter from 2019, you could also possibly qualify to apply for the tax credit.

Maximizing Your ERC Credit Savings

As a business owner, the process of applying for the Employee Retention Credit alongside everything else you have to worry about may seem daunting. But there are ways to maximize your ERC credit savings to make it worth it, and a team of tax professionals, like those at Dayes Law Firm, may be able to help you if you’re concerned about applying on your own.

You can potentially claim up to $5,000 per employee for 2020. For 2021, the tax credit can be up to $7,000 per employee per quarter. A guide from the United States Department of the Treasury itself notes that for the year 2021, “That means this credit is worth up to $7,000 per quarter and up to $28,000 per year, for each employee.” The average amount claimed per employee is $6,000, which could mean big savings for you and your business! 

You can maximize the potential funds your business could receive by working out details like what your eligible costs are — besides wages like employer-paid healthcare and pension contributions — and who among your staff counts as part-time employees versus full-time equivalent (FTE) employees. If you received a Paycheck Protection Program (PPP) loan, or are not sure if your business is considered a Recovery Startup Business, those details matter too, and a reputable ERC team can help you work them out accordingly. 

Call Dayes Law Firm for Assistance with the ERC

There are so many elements to consider when it comes to Employee Retention Credit eligibility and maximizing your business savings with the ERC tax credit, including what counts as qualified wages, eligibility under the governmental order test, and more.

At Dayes Law Firm, our team and our partners want to help you secure the best possible refund for you and your business. We can determine your ERC tax credit eligibility, and get to work maximizing your refund for you, so you can focus on running your business instead!

Our experienced tax attorneys are ready to help you claim the tax incentives your business is entitled to and get the funds you deserve for weathering the worst of the financial uncertainty surrounding COVID-19 business operations. 

Please contact us today to learn more. We can offer an initial no-obligation, free consultation to discuss your ERC options with you. Give us a call or fill out the form on this page today to get in touch!