What You Should Know About the ERC Tax Credit
Business owners had to make a lot of tough decisions during the worst of the COVID-19 pandemic. A lot of businesses struggled financially due to shutdowns and cuts to sales that resulted in decreased revenue. But that’s why the Employee Retention Credit, also known as the ERC tax credit, was established – to help provide financial relief for American businesses impacted by the pandemic.
What is the ERC Tax Credit?
The ERC is a fully refundable payroll tax credit. It was created as part of the CARES Act and rewards businesses that experienced major setbacks during the pandemic but continued to employ W2 staff. If that includes you and your business, you may be eligible for the ERC tax credit.
How Does the ERC Tax Credit Work?
Simply put, the ERC tax credit offsets the quarterly employment taxes businesses are required to pay. Your business could be eligible to receive an ERC check if you suffered losses and faced restrictions during the COVID-19 pandemic, particularly if those losses and restrictions happened between Q4 2020 and Q3 2021.
Who is Eligible for ERC?
Your business may be eligible for the ERTC if it meets the qualifications below, but if you’re unsure, our team at Dayes Law Firm has attorneys ready to help you now. The qualifications include:
- Your business operations must have been fully or partially shut down, OR you had to enforce reduced business hours because of governmental authority
- Your business suffered a significant decline in quarterly gross revenue when measured against 2019
- At least a 50 percent decline from 2019 to 2020
- At least a 20 percent decline from 2019 to 2021
- For Recovery Startup businesses – 3rd and 4th quarter 2021 only:
- Your business began carrying on trade or business after February 15, 2020
- Your business has annual gross receipts that do not exceed $1 million
- Your business is not eligible for the ERC tax credit under the other two categories
When is the ERC Deadline?
The deadline to apply for your Employee Retention Tax Credit is coming up soon! The credit is for quarterly payroll tax filings from 2020 and 2021, but businesses can claim the ERC tax credit retroactively.
Tax law states that the statute for payroll taxes begins on April 15th of the year following when the calendar quarter ends and continues for three years. That means the ERTC deadlines are as follows:
- For all quarters in 2020, the deadline to apply for the ERC is April 15, 2024.
- For all quarters in 2021, the deadline is April 15, 2025.
Call Dayes Law Firm for ERC Help
If you believe your business might meet the requirements for the Employee Retention Tax Credit due to shutdowns, revenue decline, or suspended operations, the team of experienced tax attorneys at Dayes Law Firm can help.
Our team can help determine if your business is eligible for the ERC tax credit and file the appropriate amended quarterly payroll tax returns on your behalf to claim the funds your business is entitled to so you don’t have to worry about the process!
Contact Dayes Law Firm today to see if you qualify for the ERC tax refund. Our team of knowledgeable tax attorneys is ready and waiting to help you get the best chance at getting the highest potential ERC tax credit refund for your business. For a no-obligation, free consultation, call us at (800) 503-2000 today!