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August 11, 2023

Employee Retention Tax Credit (ERC) "What you need to know”

Covid-19 Cares Act ERC, Tax & Accounting
Employee Retention Tax Credit (ERC)
Get the facts before you act

Employee Retention Tax Credit (ERC) "What you need to know”

"What is the ERC Program?"

The Employee Retention Tax Credit (ERC or ERTC) program has been a hot topic among business owners recently. But what exactly is it and why is it so important?

The ERC program was established in March 2020 as part of the COVID-19 stimulus bill known as the CARES Act. The program allows business owners to apply for a tax credit worth up to $26,000 per W2 employee. This is not a loan, but rather a way for business owners to receive some of their tax-paid money back.


"So why is there so much buzz around the ERC program?"

For one, there's a staggering trillion dollars allocated to this program, with the aim of revitalizing the economy. ERC allows business owners to reclaim their Employee Retention Tax Credit, which could be worth up to $26,000 per W2 employee. It's important to note that this is not a loan, but rather a way for businesses to recover some of their tax-paid money. The program was launched back in 2020 as an incentive for business owners to retain their employees amidst the pandemic. In essence, ERC serves as a reward for businesses that have kept their employees working during the pandemic.


"Why Aren’t More Businesses Taking Advantage of ERC?"

Despite the potential benefits of the ERC program, many businesses have not taken advantage of it. This may be due to misconceptions about the program. For example, when the ERC program was first established, businesses that had taken a PPP loan were not eligible to apply. However, this changed in December 2020 when the "Consolidated Appropriations Bill" became law and expanded the ERC program to include businesses that had taken a PPP loan.

n addition to this change, the maximum number of W2 employees a business could have and still be eligible for the ERC program was increased from 100 to 500. This means that more businesses can now take advantage of the program and receive money back.

Some business owners are missing out on the Employee Retention Tax Credit (ERTC) because their Financial Advisors or CPAs didn't fully understand the law. Others may have taken advice from the ERC marketing companies the IRS is warning about.

Another misunderstood fact is that even if your business had to pivot during the pandemic and had an increase in revenue, you may still qualify for the ERTC. The law was designed to help businesses of all sizes up to 500 full-time W2 employees, regardless of their revenue, so don't hesitate to explore this valuable opportunity.


"Should You Have Your CPA Handle Your ERC Application?"

While some business owners may consider having their CPA handle their ERC application, it is important to note that not all CPAs specialize in the ERC program. The program is complex and ever-changing, with over 5,000 pages and PDFs listed on the IRS website. Business owners should consider using a CPA firm that specializes in the ERC program and has a track record of successful filings.


"It's important to realize that there are two separate parts when considering the ERC Tax Credit: 'QUALIFICATION' vs 'CALCULATION"

QUALIFICATIONS: Are you qualified? And you have to ask that question for each quarter you are applying for during 2020 & 2021. There are over 12,000 local and federal mandates that could affect which quarters you qualify for.

CALCULATIONS: How much is your return? So there are Qualifications and Calculations, and they are separate from each other... This is why you should consider an expert to handle your Employee Retention Tax Credit. Not all returns are the same, and I am sure you would like to maximize yours.


"How to Choose the Right Firm to Assist with Your ERC Application."

When choosing a firm to assist with an ERC application, business owners should ask four key questions: Are they a CPA firm? Do they offer long-term audit support? How many filings have they completed? What is their average return per employee?

By asking these questions and choosing a reputable firm that specializes in the ERC program, business owners can maximize their return and put more money back into their accounts.

Here are some answers to these questions when comparing firms:

#1- Are they a CPA firm? Do CPAs sign your files?

Compared: “Being the largest CPA firm that solely focuses on ERC.”

#2 - Do they offer long-term audit support?

Compared: “Yes, offering long-term audit support with $1,000,000 E&O Insurance.”

#3 - How many filings have they completed?

Compared: “Having completed over 15,000 successful filings totaling over $7 Billion dollars in returns.”

#4 - What is their average return per employee?

Compared: "Average refund per employee is about $20,000."

The Employee Retention Tax Credit Program presents a tremendous opportunity for businesses to receive much-needed financial relief during these challenging times.

Put a team of over 400 members, including CPAs, Tax Attorneys, Forensic Accountants, Compliance and Review Specialists, and IRS Enrolled Agents to work for you today.


Want more information?

Chris Rowland



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