ERC Tax Credit FAQ: Your Top Questions Answered by ERC Tax Experts

ERC Tax Experts Resources

April 14, 2023  |  8 min read

You kept employees on during the height of COVID-19. You pushed your business through government-ordered lockdowns, endured supply shortages, and found workaround solutions for social distancing protocols. Now you’re ready to claim the Employee Retention Credit (ERC). But the question is, “How, exactly?” In this article, we’re answering your top questions about the Employee Retention Credit. Our team of ERC Tax Experts has compiled answers to the most frequently asked questions about the credit, including eligibility requirements, important deadlines, application processes, and more. 

Your Top Questions Answered by ERC Tax Experts

What is the Employee Retention Credit?

The ERC is a refundable payroll tax credit of up to $26,000 per employee. It was initially passed under the Coronavirus Aid, Relief, and Economic Security Act, or the CARES Act, to reward business owners for retaining employees throughout the COVID-19 pandemic. 

The ERC was available for businesses from 2020 Quarter One through Quarter Four and 2021 Quarter One through Quarter Three. Startup businesses created during this time range can also apply for ERC funds for 2021 Quarter Four.

How Does My Business Qualify for an ERC Refund?

There are three main qualifiers for the Employee Retention Credit. For businesses to be applicable to receive an ERC refund, they must meet at least one requirement:

  1. A full or partial suspension of business operations because of COVID-19 government orders.
  2. A significant decline in gross receipts (SDGR) during any quarter of 2020 or the first three quarters of 2021.
  3. Qualifying as a “recovery startup business” in the third or fourth quarter of 2021.

For 2020 quarters, SDGR is defined as a decline of at least 50 percent compared to the same quarter in 2019. For 2021, this metric has been reduced to a decline of at least 20 percent for the comparable quarter.

If your business qualifies for a refund, you’ll want to work with ERC Tax Experts to file confidently. On average, our clients get 40 percent more ERC money than payroll companies or traditional income tax CPAs.

What is an Eligible Employer?

United States small businesses (including tax-exempt organizations) are considered eligible employers if they carried on a trade or business during 2020 or 2021 and have anywhere from one to 499 full-time W-2 employees.

Eligible employers experienced any of the abovementioned qualifications during any quarter in 2020 or 2021.

What are Qualified Wages?

Qualified wages are compensation provided to eligible full-time employees during an eligible period, including health plan expenses that are properly allocated to the wages.

What is Considered Partially Suspended?

Partial suspension applies to the period that a business was not able to operate to full capacity or ordered to modify operations due to a government order or subjected to specific restrictions. 

For instance, partial suspensions could include a gym reducing capacity, changing to appointment-only, or closing daycare centers. Or if a restaurant changed to takeout orders only or limited dine-in service due to social distancing requirements, this could also be considered a partial suspension. Additionally, if a business had trouble ordering and receiving vendor supplies or materials that were shut down during COVID-19, this, too, could translate to being considered a partial shutdown. 

These instances are just a small sample of cases that could qualify your business for ERT tax credits. Our experts have a combined 50 years of experience and are well-versed in what could qualify your business for the Employee Retention Credit. If you’re ready to find out if your business qualifies, fill out our quick two-step questionnaire to get started.

What’s the Deadline for Claiming the ERC?

All eligible employers will receive funds they’re qualified for if they file their claim within a three-year lookback period. But you won’t want to wait until the deadline is looming; File today with ERC Tax Experts and get up to $26,000 per employee within seven days.

When and How are ERC Refunds Sent?

Employee Retention Credit refunds are given as a paper check, sent from the Internal Revenue Service (IRS), and traditionally mailed no sooner than six months after approval. But if you file with ERC Tax Experts, you can access their cash refund in as little as seven days. Learn why you should work with us to file your ERC tax credit.

How Can I Spend My ERC Refund?

Because the ERC is a cash refund, you can spend the refund any way you wish, including dividends to owners.

What are the Main Differences Between PPP and ERC?

While both the Paycheck Protection Program (PPP) and the Employee Retention Credit (ERC) were part of the CARES Act, there are some notable differences: 

Chart comparing ERC and PPP structure, funding, and taxation

What if I Claimed a PPP Loan? Do I Still Qualify for the Employee Retention Credit?

Yes! Before the Consolidated Appropriations Act (CAA) was passed in December 2020, businesses couldn’t claim ERC if they had already accepted a PPP loan. With the updated CAA regulations, businesses can retroactively claim the ERC even if they claim a PPP loan.

If I Already Filed My Amended Form(s) 941-X, Can I Still Work with ERC Tax Experts to Get More?

Yes, absolutely. It’s common for us to do “second look” work to uncover additional hidden refunds. For example, if we find more credit than initially claimed, we help clients by re-amending IRS Form(s) 941-X to request extra funding. 

Additionally, if you’ve already cashed your ERC refund, there’s still an opportunity to re-amend and re-file your claim. 

Begin Qualifying for the ERC Today

At ERC Tax Experts, we make it easy to get started with our five-step process:

  • Answer 10 Questions: Fill out our simple ten-question survey. No cost. No commitment. It takes no more than a couple of minutes to complete.
  • Hop on a Call: Within a few minutes, we’ll give you a call to share your next steps and provide an initial estimate of your ERC refund.
  • Sign Our Engagement Letter: Give our experts the green light by signing an Engagement Letter, which formally kicks off the process of getting your money.
  • Gather Needed Documents: We’ll outline all the ERC documents required for us to get your credit into your pocket! Your information is always safe and secure in an encrypted, cloud-based shared drive.
  • Get Paid: We’ll submit your ERC claim to the IRS, and you’ll get a check from the US Treasury in roughly 8 to 12 months. Qualified clients can also choose our Advance Payment option to put cash in your pocket in as little as seven days!

Capitalize on the ERC tax credit opportunity to get your deserved payout within one week. While the IRS typically mails ERC checks six months or more after filing, we understand that time is money. With ERC Tax Experts, clients who qualify can receive their ERC refund in as little as seven days after submitting their client package to the IRS. This service isn’t available anywhere else. So get started by estimating your refund with ERC Tax Experts today.

Begin Qualifying Today

And capitalize on the Employee Retention Credit (ERC) tax credit opportunity.

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