How Can I Estimate My Employee Retention Tax Credits?

December 22, 2023
Dayes Law Firm

Even though there is currently a pause on new Employee Retention Tax Credit (ERTC/ERC) applications, if you haven’t yet applied for the tax credit on behalf of your business and think you’re eligible to do, so there’s still time before deadlines arrive. But maybe you’re interested in a quote on how much you can expect in an ERTC refund first. There is, in fact, a way to get a basic estimate of your potential ERTC credits. 

How to Estimate ERTC Credits

The ERTC is generally available to eligible employers for wages paid from March 13, 2020, through December 31, 2021. To calculate your eligibility to receive it, your business must have experienced fully or partially suspended operations due to government orders related to COVID-19 or underwent a substantial decline in gross receipts during a quarter in that time period as compared to the same quarter in 2019.

You and your business may be able to claim a credit for 50 percent of the first $10,000 in qualified wages you paid each employee during 2020 and 70 percent of each employee’s first $10,000 in qualified wages per quarter for tax year 2021. In total, you might be able to claim up to $26,000 in refundable tax credits per employee.

You’ll also have to determine which wages qualify to claim the credit. This will partly depend on the number of full-time employees you employ; a full-time employee is a staff member who averages at least 30 hours of service per week or 130 hours per calendar month for the purposes of the ERTC.

As a business owner looking to claim the Employee Retention Tax Credit, you might want to consider working with a tax professional to work out details like whether the wages paid to all your employees qualify, or only the wages you paid to employees not providing services, or several other scenarios. This will matter when it comes to estimating your ERTC refund amount. 

Recovery startup businesses have their own set of rules, and you may be only able to claim $100,000 for the 2021 calendar year if your business qualifies under this category. All in all, it might not be a bad idea to work with a team of tax professionals to work out these details and to get an accurate idea of how much you might expect to get from ERTC credits. And that’s where Dayes Law Firm comes in.

How Dayes Law Firm Can Help 

The team at Dayes Law Firm can help you calculate your eligibility for the Employee Retention Tax Credit and help you determine just how much you might be able to receive in an ERTC refund. We can help you estimate your ERTC credits and plan what you might be able to use the money for to support your business. 

Please feel free to contact us for a free consultation regarding any of your ERTC questions or concerns. Our firm has already helped many businesses claim millions in funds for Employee Retention Tax Credit claims, and we are ready to assist you as well. 
Give us a call at (800) 503-2000 to learn more today!