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The COVID-19 pandemic has had a significant impact on businesses across the country. Many businesses were forced to close or reduce their operations due to government orders aimed at slowing the spread of the virus. If your business was forced to close during the pandemic, you may be wondering if you can be eligible for the Employee Retention Credit (ERC).
What Is The Employee Retention Credit?
If you’re not already aware, the Employee Retention Credit (ERC) is a refundable tax credit that was introduced as part of the CARES Act in March 2020. The credit is designed to help businesses retain their employees during the COVID-19 pandemic. The credit is available to businesses that meet certain eligibility criteria.
Your Employee Retention Tax Credit is money you have already paid, which the government is returning to you. Since you retained your employees during the pandemic, the U.S. Congress passed a bill that returns a portion of the wages you paid to your employees between March 13, 2020 and September 30, 2021. A PPP loan does not disqualify you from receiving your refund. We simply remove the wages you used for your PPP loan from our calculations. We make the process simple and easy. You pay nothing up front and we only get paid when you receive your refund.
Is My Business Eligible?
If your business was forced to close due to government orders, you may be eligible for the Employee Retention Credit. Specifically, businesses that were fully or partially suspended due to government orders may be eligible for the credit.
Additionally, businesses that experienced a significant decline in gross receipts may also be eligible for the credit. To qualify for the credit based on a decline in gross receipts, a business must have experienced a decline of more than 50% in gross receipts for a calendar quarter compared to the same quarter in the previous year.
The ERC is pretty complicated, and the requirements have changed over time, so you may have heard different things that make you think your company won't qualify. We know it can sound too good to be true!
So, to put your mind at ease, we’d like to provide you with some external sources of reference about the ERC:
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