File for your business Employee Retention Credit while you still have time!
If you’re business struggled to keep up and suffered losses due to the COVID-19 pandemic, you’re not alone. There is recovery help available for many businesses, including a tax credit called the Employee Retention Credit (ERC). Receiving this credit requires a special filing that must be completed separately from your regular tax filing. An ERC Specialist can help you get the filing done quickly, and make sure you’re receiving as much as possible from the program.
What is ERC?
Employee Retention Credits are a government incentive designed to support businesses during challenging times, such as the COVID-19 pandemic. ERC provides eligible employers with a refundable tax credit for retaining employees and maintaining payroll continuity. The credit can be a significant source of financial relief, helping you offset employment costs and stimulate your business growth.
When Do I Need to File?
The IRS has tight deadlines in place for ERC filings. The deadline for filing an ERC claim for Q2, Q3, and Q4 of 2020 is April 14, 2024. But the deadline for business owners to amend their 2020 income tax returns is even sooner - March 15, 2024. Here are some other important IRS dates to note:
February 1st - Last day to submit a questionnaire and include eligible 2020 quarters
February 8th - Last day to have all documents uploaded for eligible 2020 quarters
February 22nd - Last day to review/approve Analysis and sign ERC Specialists Service Agreement for eligible 2020 quarters
Customer claims that are not approved and signed by this date will be reprocessed to remove 2020 quarters
March 1st - Last day for ERC Specialists to file eligible 2020 filing periods
If a customer claim has not completed the Tax Record Verification process by this date, it will be reprocessed to remove eligible 2020 quarters
March 15th - Last day to amend business income tax returns for 2020
Customers will need to work with their tax professional to complete this step, using ERC claim documentation provided by ERC Specialists
Who Qualifies for ERC?
The Employee Retention Credit program was created to reward business owners that retained employees during the COVID-19 pandemic. This program covers the time period from March 22, 2020, to December 2021. Your business could qualify for ERC if you experienced a partial or complete suspension of operations that includes:
A significant reduction in revenue during 2020 or 2021, as compared to 2019
Social distancing requirements that reduced capacity
Reduction of hours of operation
Distribution delays or suspensions
Supply chain disruptions
Suspended onsite work or client meetings
Businesses that have previously received PPP or EIDL funds may also be eligible for ERC. This recent change in eligibility criteria presents an excellent opportunity for businesses to maximize their benefits. We strongly advise checking your eligibility again, even if you were previously ineligible.
How much can you get?
The amount of tax savings awarded to each business varies based on a number of factors. For the 2021 program, the ERC is equal to 70% of qualified wages that eligible employers paid their employees, up to $10,000 per quarter. That adds up to an annual maximum credit of $26,000 per employee. Imagine unlocking up to $26,000 per employee in potential savings for your business. Employee Retention Credits have the potential to provide substantial financial relief.
A quick conversation with a Verisage ERC Specialist can help you to determine if your business qualifies, how much credit you can expect to receive, and what you need to do to file.