The Employee Retention Credit is the refundable tax that is credited to the employees. Sometimes the employment credit can rise to 50% of the qualified wages that an employer pays to the employees. The employers can get access to the credit; all they will have to do is reduce the employment tax deposits. This is a step by the government to help the people who have started their business in 2019 or 2020 or the businesses that have undergone a huge blow due to the Covid-19 lockdown.
What is the reason for the partial suspension of business operations?
In order to qualify as partially suspended, a business needs to have limitations that are chalked out by federal, state, or local orders.
What are the eligibility criteria for ERC?
The candidates who want to claim the ERC 2020 need to have their business partially or fully shut down due to the Covid-19 lockdown. They will also need to show the loss they have faced in that year. The revenue generated for 2020 must be at least 50% less than the gross income of the company in 2019. Further, if a company wants to claim the ERC 2021, they have to provide records of the gross income of 2021, and that should be 80% less than that of 2019. People who are freelancers can not claim ERC.
Can a company apply for ERC without a lawyer?
The answer to this question is yes. But being an employer, you might have too much to handle. Especially the loss you have undergone due to the lockdown. Why burden yourself with more stuff? You can hire an ERC specialist to do the job for you.
ERC claims need a load of paperwork. You need to fill out the paperwork and meet deadlines in submitting them. You also need to present a lot of documents to get the claim approved. That is a lot of work. An ERC specialist knows how to handle such a job, as this is what they are getting paid for. So hire an ERC specialist and let them handle the whole operation while you can focus on other areas of your business.
Do not worry if you have faced a huge blow due to the pandemic. ERC will help you recover the losses, and you can start continuing the business with new enthusiasm.