Is My Business Eligible For ERC

The ERTC was established by the Coronavirus Aid Relief and Economic Security Act or CARES, which became law in early 2020. Its objective was to assist businesses in retaining their staff on payroll. The ERC was a component of a major relief package meant to aid the country through the initial stages of the pandemic.
With the initial plan, “small to median size businesses were eligible to receive as much as 50 percent of qualifying wages that would be paid beginning in March until December of 2020.” The program now allows employers with loans under the “Paycheck Protection Program or PPP.”

In 2020, eligible businesses could claim as much as $5000 for each employee, with the max credit in 2020 per employee in wages being $10,000. The tax credit was increased to 70 percent for wages paid to employees through 2021, which included some health benefits.
Currently, stipulations indicate businesses can retroact to receive ERC for their companies under new eligibility guidelines. Go here for two ways to qualify for the credits.

The public, businesses, and employees find the ERC complex and confusing, and it is, but it’s essential to take the time to decipher the language or have someone do so for you because it could mean a great deal of support for your company.
How can a business determine eligibility under these guidelines to then receive the credits? Let’s find out the employee retention credit qualifiers to see if your business meets these.

What Are The Qualifiers For The Employee Retention Credit

When it comes to translating government incentives or tax credits, it can get exceptionally confusing. Often so much so that the employers can’t discern whether they qualify. That’s the case with the employee retention tax credits; please read this article. These were provided due to the coronavirus. Many eligible businesses have yet to claim them.
The IRS is attempting to clarify the eligibility requirements and application process so employers will now take advantage since it will soon be impossible to do so. Let’s look at some of the details on ERC.
The indication is that qualifying for the ERTC depends on 2019 business records. For those with less than 500 staff members, you may qualify. Another factor will be the tally of gross receipts.
These must result in a 50 percent decrease in the 2020 quarter as compared to the same 2019 quarter, plus no less than a 20 percent decrease in the 2021 quarter compared to that same 2019 quarter.
A business employing 100 or fewer staff initially qualified for “100 percent employee wage credit regardless of whether they remained open or were forced to shut down.”
If a company had more than 100 staff members continuing to be paid wages despite being unable to provide services due to COVID, they would qualify.
The numbers were altered when “large employer” was redefined, however. Instead of “more than 100 staff,” it was changed to “more than 500 staff.” That allows a greater number of businesses to qualify now for the credits. To fully qualify, a company must meet one of the following in either 2020 or 2021:
1. Gross receipt tallies that equate to a 50 percent decrease in 2020 or a 20 percent reduction in 2021 compared to the same quarter in 2019
2. The COVID-19 pandemic government limitations and shutdowns resulted in either partial or full shutdown of operations

FAQS Concerning The ERC 

Many businesses are unaware they were able to claim ERC in 2022 and have the potential for doing so this year as well. Some of these common FAQs might answer some of your questions to help you determine your eligibility so you can take advantage of the credits if you do qualify.

Is ERC Available For Individuals To Claim In 2023 

The credit is still available to claim in 2023 if a business recovered from significant gross receipt reductions and did not receive the credits to this point. The company has “three years from the original tax return filing date or two years from when the tax was paid, the latest of the two, for filing for ERC.
Beginning March 12, 2020, review the wages paid to your staff after that date to see if you qualify. Learn how to apply for ERC at youtube.

What Is The Deadline For ERC 

The date of tax returns will determine the deadline, which will vary. Businesses are given a three-year time frame from when the original payroll tax returns were submitted to check their wages to see if they qualify. It is time-sensitive once you realize you are eligible.
No one wants to miss that window of opportunity that could equate to as much as thousands of dollars to use for business purposes. The plan itself ended on September 30 in 2021 for a majority of businesses. Recovery startup businesses paying wages were given a January 1 of 2022 deadline.

The IRS Provided A Safe Harbor; What Is It? 

“Revenue Procedure 2021-33” was released from the IRS on August 10 of 2021 to offer businesses a “safe harbor” allowing the exclusion of:
• Restaurant revitalization funds
• Shuttered venue operators’ funds
• Forgiveness of PPO loans
Businesses did not need to include these with gross receipts when determining ERC eligibility.

How Do Businesses Apply For The ERTC In 2023 

If you haven’t already applied for the employee retention tax credit, you can do so in 2023.
It’s considered filing “retroactively” for the ERC. It involves submitting an “Adjusted Employer’s Quarterly Federal Tax Return or Claim for Refund, Form 941-X.” This serves as an amendment to Form 941, the original payroll tax return.

Final Thought 

You can find more details about the ERC, particularly on the IRS website. The ERC has seen many modifications since it was introduced in 2020 with IRS guidance.
If you are still determining eligibility and have yet to apply, it’s important to look at the wages from March 12, 2020. You can gain much support for your business if you qualify.

Read Also:

• Employee Training Videos: Practical Guidelines And Tips
• The Employee Experience: How to Make Your Workers Happy
• 6 Reasons Why Employee Communication is Important for HR