High 6 myths concerning the Worker Retention Credit score | Yelp
January 19, 2023
As a small enterprise proprietor, how a lot have you learnt concerning the Employee Retention Credit (ERC)? It’s a payroll tax refund from the federal government that’s provided to companies that stored staff on payroll throughout COVID-19. With the ERC, eligible corporations have the chance to get up to $26,000 per employee.
This chance has big potential for a lot of native companies, nonetheless, there’s been lots of misinformation concerning the ERC, inflicting some corporations to lose out on impactful capital for his or her enterprise. Let’s debunk widespread myths concerning the ERC so your enterprise doesn’t depart any cash on the desk.
Delusion #1: My enterprise obtained a Paycheck Safety Program (PPP) mortgage, so it doesn’t qualify
The Relief Act in December 2020 modified the rule that disqualified corporations that obtained a PPP mortgage from acquiring the ERC. Now, your enterprise could possibly be eligible for the ERC, even when it collected PPP loans.
Delusion #2: My firm doesn’t meet authorities shutdown necessities
When you consider a shutdown, it’s possible you’ll assume this implies an organization closed down utterly. However that’s not essentially the case. The IRS has stored the definition of a government shutdown pretty open, permitting room for various conditions. Relying on your enterprise’s operations throughout COVID-19, it could qualify for shutdown necessities, making it doubtlessly eligible for the ERC.
Delusion #3: My enterprise’ gross sales have elevated since COVID-19, so it isn’t eligible
A income improve throughout 2020 and 2021 doesn’t routinely disqualify your enterprise. Even when your organization’s income elevated throughout COVID, it may nonetheless be eligible toobtain the ERC if it skilled commerce, group assembly, and/or enterprise journey limitations or was topic to a partial or full suspension on account of a COVID-19 authorities order.
Delusion #4: My group is a nonprofit, so it may well’t obtain the ERC
Charities can benefit from the ERC too! From suspended operations to restricted commerce, journey, or group conferences as a result of pandemic, tax-exempt organizations might also qualify for a payroll tax refund.
Delusion #5: It’s too late for my firm to assert the ERC
Your online business can nonetheless file a declare to obtain the ER, however the clock is ticking, so it’s necessary for corporations to leap on the chance now because the ERC panorama may change at any time. Fortuitously, there are lots of ERC corporations with extremely certified professionals who’re expert within the ERC’s nuances, which will help your enterprise navigate the method as simply as potential.
Delusion #6: My CPA stated that my enterprise isn’t eligible for the ERC
Even when your CPA says your organization doesn’t qualify for the ERC, it nonetheless could. An ERC firm that’s well-versed within the present eligibility necessities will help ensure your enterprise doesn’t miss out on potential funds.
Concerning the writer
Howard Makler is the co-founder and CEO of Innovation Refunds, a group of extremely certified tax attorneys and CPAs who’ve helped greater than 10,000 corporations obtain over $2 billion in ERC refunds. Innovation Refunds’ worth is derived from its prolonged community of enterprise companions, monetary establishments, cutting-edge know-how assets, and trusted advisors.
ERC refund professionals like Innovation Refunds make the ERC course of less complicated for enterprise homeowners. Beginning with an roughly eight-minute survey, Innovation Refunds’ superior software program determines your enterprise’s eligibility for an ERC refund. The group of execs then estimates your organization’s potential refund with no upfront value. From there, you’ll be able to select to have Innovation Refunds submit all the required paperwork. As soon as your refund is accepted and funds arrive at your enterprise, Innovation Refunds takes a fee.
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