The Role of HR Departments in Facilitating ERC Claims

August 14, 2023
Dayes Law Firm

Although the Employee Retention Tax Credit is available to many different types of businesses, some employers may be turned off by the idea of the paperwork involved in claiming the ERTC to pursue it. The truth is, if you’ve got a good Human Resources department, they might be able to help. 

The role of HR departments in facilitating Employee Tax Credit claims cannot be understated, especially if you have a large number of staff members to consider. 

HR Departments and Claiming the ERTC

The ERC/ERTC is still available to eligible employers for wages paid from March 13, 2020, through December 31, 2021.

Your HR department may be able to help you determine if your business is permitted to apply for the ERTC in the first place, based on that eligibility period. They can sort out records from that exact time period to eliminate documentation that doesn’t matter or can’t be considered for claiming the Employee Retention Tax Credit. 

Staff Members and Employee Tax Credit Claims

Possibly one of the most important ways HR departments can help facilitate Employee Retention Tax Credit claims is by helping you determine the number of employees your business had on payroll during the ERTC qualifying period. 

You’ll need to work out your full-time equivalent employee (FTE) numbers for your business in order to claim the tax credit. A full-time employee is defined by the IRS as an employee who averages at least 30 hours of service per week or 130 hours per calendar month.

According to the IRS, the ERTC is applicable to businesses with 100 or fewer full-time employees for the year 2020. At that time, large employers were considered businesses with more than 100 full-time employees.

But when it comes to amending tax returns for 2021, the number of employees allowed for the business to be considered a small employer increased to 500 or fewer full-time staff members. If you had more than 500 employees during the ERTC qualifying period, but they weren’t all full-time employees, you might still have options to apply for the tax credit.

Your HR department should have all the records needed to determine the number of employees, of any type, on payroll between March 13, 2020, through December 31, 2021. This is incredibly helpful information when it comes to Employee Retention Tax Credit claims. 

In 2020, businesses can claim up to $5,000 per employee, according to Experian. For 2021, the credit can earn you up to $7,000 per employee per quarter. That could result in a total of $21,000 for your business for the year 2021. 

Dayes Law Firm and ERTC Claims

It’s clear that you could be leaving serious money on the table if your business could retroactively claim the Employee Retention Tax Credit and you don’t pursue the credit. While your HR department could in fact be a very valuable resource when it comes to facilitating tax credit claims, you might also want to consider getting the assistance of a team of tax professionals as well. 

Dayes Law Firm and its partners have supported business owners with filing for more than $250 million in ERTC refunds so far! We have the experience and resources to help you and your business claim the tax credit, too. 
Please give our team a call or fill out the form on this page to see how we can best assist you with your ERTC needs. Contact us today to see how we can make the process even easier for you, even if you’ve already got some documentation ready to go thanks to your HR department.