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The Employee Retention Credit that No One Knows About

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The Employee Retention Credit that No One Knows About

May 19
19:42 2022
Get help with this underutilized program and boost your business

May 19, 2022 – The Employee Retention Credit (ERC) was created through the CARES ACT in March of 2020. It was designed to reward and strengthen small to medium businesses with 500 or fewer W2 employees that were retained during the pandemic. Due to emergency government orders, businesses shut down or were restricted during the pandemic. To keep the economy intact during this challenging situation, the government released several programs aimed at supporting those businesses negatively impacted by the pandemic. ERC was one of those programs.

If qualified, ERC allows up to $26,000 per employee. This means that a company with 10 W2 employees can receive up to $260,000 in funds for 2020 and Q1-3 in 2021. It is important to know that this program does not have a cap on funding and is not a loan. It is a refundable tax credit with a government incentive attached to it. Businesses receive funds from the IRS in 6-8 months. However, as more businesses apply for this credit, there could be additional delays.

Unlike the PPP, these funds do not have to be paid back and you can use them for any purpose. Only 50 billion of the 400 billion allocated for this credit has been claimed. Although this program was released simultaneously with the PPP and EIDL programs, it has been poorly utilized nationwide because it offered much less funding, restricted qualification to a few businesses, and has been amended several times causing enormous confusion.

The most recent amendment was signed into law in November 2021. Now the qualification rules have been significantly reduced. Qualification is based on business operations that have been affected by the various government actions that were taken to stop the spread of COVID 19.

There are three different ways your business can qualify for employee retention credits: revenue reduction, supply chain disruption, and partial or full suspension of operationsThis makes it easier for business sectors such as manufacturing, food service, retail, and construction to qualify because disruption was significant and widespread. 501c3 businesses may qualify as well.

More information can be found @ https://rebrand.ly/ercfundingspecialist

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Website: https://rebrand.ly/ercfundingspecialist