Do I Qualify for the Employee Retention Credit?

Are you wondering if you qualify for the Employee Retention Credit (ERC)? The ERC is a refundable tax credit available to employers whose gross income has decreased by more than 20%. Even if your company has more than 500 employees, you may still be eligible for the credit. The amount of the credit is based on the qualifying wages paid to employees during their period of eligibility. For many companies, the ERC can provide a greater benefit than the Paycheck Protection Program (PPP).

The most recent requirements for the Employee Retention Credit are similar to those originally established by the IRS. Even if you didn't apply for the credit initially, you can still file an amended payroll tax return and take advantage of it. The Consolidated Appropriations Act (CAA) and the Bipartisan Budget Act (BIB) have also added special qualifications for employers with severe financial hardship or who are part of a startup in recovery. To determine if you qualify for the ERC, we'll need to review your company's payroll data and gross revenues.

It's important to understand how this program works, who qualifies for it, and how to claim it. With all of the changes in programs and incentives, it can be difficult to keep up with ERC qualifications. If your business is eligible under the government order requirement, operations must have been fully or partially suspended during the corresponding calendar quarter due to a government order limiting commerce, travel or group meetings due to COVID-19.Windes, a California-based tax planning firm, offers ERC qualification assistance to help you determine if your company qualifies for the credit. The best way to figure out if you meet the requirements is to work with a professional tax planning and advisory firm that can help you navigate the complex changes in ERC qualifications.

Denise Lefler
Denise Lefler

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