ERC Tax Credits for Governmental Restrictions

The Employee Retention Credit program was written to return a portion of the payroll taxes paid during the COVID-19 pandemic in the form of ERC tax credits. These funds are saving many businesses from closing because the funds are non-taxable and can be spent as the business owner sees fit.

Unfortunately, the many misunderstandings around the program have caused business owners to lose trust in the process. Applying for the ERC requires payroll tax expertise that is out of the reach of many small businesses. You have come to the right place.

Access to payroll specialists will make the ERC tax credits process easier than you can imagine. Every step is clear and easy to complete. The most difficult part, the calculation, will be performed by people will decades of payroll experience. Even if your accountant told you that your business does not qualify, you and I can complete the qualification process. In a matter of a few minutes after gathering your profit and loss reports for 2019, 2020 and 2021, you can have an estimate of the payroll tax credits you are due from the tax department.

Maybe your income did not decrease, and you took out PPP loans. If you had other impacts, including supply chain issues, this IRS notice could apply to you:

“Per IRS Notice 2021-20, an employer may be considered to have a full or partial
suspension of operations due to a governmental order if, under the facts
and circumstances, the business’s suppliers are unable to make deliveries
of critical goods or materials due to a governmental order that
causes the supplier to suspend its operations. This supply chain disruption
under the facts and circumstances would qualify the employer
for the Employee Retention Credit (ERC).”

ERC Tax Credit History

The Employee Retention Credit (ERC) Program was written in 2020 to refund payroll tax credits to American business owners with full-time W-2 employees. Business owners were encouraged to retain employees with the promise of recovering some of those costs in the form of non-taxable credits. Under this program, you could recover up to $26,000 per eligible full-time employee.

The America Rescue Plan has expanded the policy with an amendment that lengthens the time period to include the wages paid from March 22, 2020 through September 30, 2021. Each quarter is evaluated separately as compared to the same quarter of 2019. An amazing 80% of all American employers have the potential to qualify for the Employee Retention Credit.

If you are uncertain if your business qualifies, click the button right now and let’s find out.

Supply Chain Issues & ERC Tax Credits

Every type of business has experienced some level of supply chain interruption. None of us realized that the arrival of goods has a very broad definition. Without products, the shelves were empty and customers were unable to buy.

That is a supply chain interruption.

Without components and parts, factories were unable to assemble products to sell to retailers on the wholesale markets. Factories fell silent when one part would arrive, but not the remaining components for complex products.

That is a supply chain interruption.

For the auto shop that keeps our vehicles on the road, the lack of auto parts prevented important repairs from being conducted. As people stayed home longer, the automobiles developed other problems from lack of use. Batteries were difficult to find. Oil was scarce, which prevented routine maintenance actions.

That is a supply chain interruption.

Even if your business was not shutdown directly, or deemed non-essential, the disruptions came from every direction. Your suppliers might have been deemed non-essential. Customers became frustrated because the simplest products were not available when needed.

Profitable businesses that accepted PPP loans are still able to claim the ERC because of government regulations that stopped business operations.

Reduced Capacity & Social Distancing Restrictions

Churches were entirely shutdown with the directive to ‘reduce the spread’ of the virus. Those churches, temples and synagogues with full-time W-2 employees can qualify for the ERC program. The same process applies because even non-profit organizations pay payroll taxes.

For profit businesses, like restaurants were told to operate without the dining room. Imagine the scramble that happened in March 2020, when the refrigerators and freezers were full of food and no one could come inside to eat. Creative restaurant owners switched to online orders and customers took food home to eat with their families. Many were able to serve more people each day because the dining room limits were gone.

Even retailers were told to limit the number of people in the establishment based on the fire marshal capacity limit. Sometimes the capacity was reduced to 50% while everyone tried to stay six feet apart. Fewer customers in the store meant that each affected retailer suffered significant loss in sales, which were impacted by empty shelves from supply chain interruptions.

Countless interruptions resulted from factory stoppages. Products that were not produced and shipped affected construction projects for hotels, houses and schools. Furniture, carpet, draperies, appliances, fixtures and every type of furnishing used in living and workspaces are just now arriving.

How Are the Impacts of Governmental Restrictions Reported?

Gross receipts in 2020 and 2021 are compared to 2019 quarter by quarter. Significant losses are reported as a percentage. The IRS considers a 50% drop in 2020, as compared to 2019, and a 20% drop in 2021 in comparison to 2019. Each quarter is compared to the same quarter in each year. Even if your business made more money, you can still qualify for the ERC program.

How Much Money is Available to Your Business?

Qualifying businesses can collect up to $26,000 per employee under the ERC program. In 2020, the maximum credit is equal to 50% of the eligible employee wages (up to $10,000 in wages), which is a maximum payout of $5,000 per employee.

In 2021, the maximum credit is equal to 70 percent of the eligible employee wages, which equals $7,000 in tax credits per quarter for the first three quarters of 2021.

If every employee were to qualify for every possible credit in both years, all six quarters, your business could receive up to $26,000 per full-time W-2 employee.

Finding every possible credit is our specialty. Payroll experts with decades of experience have studied the ERC program legislation in detail. Once we complete the questionnaire, you will know the estimated amount that you can claim from the IRS.

Most importantly, don’t wait another day to contact me and get started. Congress allocated a certain dollar amount in ERC tax credits. Business owners are going to want to get started.

Refuse to leave one dollar on the table. You could have funds for your project if you act today and claim the ERC tax credits you deserve to collect.