Employee Retention Tax Credit (ERC)

There is a lot of misinformation online. No, the Employee Retention Credit (ERC) is not over. Businesses can still assess their eligibility and apply for the ERC tax credit by filing amended returns before the deadline of April 15, 2025.

No, you do not have to repay the ERC if you qualify. The ERC is a refundable tax credit, which means that if your business is eligible, you will receive a check from the IRS. Unlike a loan or even the Paycheck Protection Program (PPP), the ERC does not require repayment or forgiveness.

We work on a contingency basis, meaning that our fees are only charged if your business successfully qualifies for and receives the credit. If you don't qualify, we'll let you know at no cost to you. Our experts are highly trained and can determine your eligibility in just 10 minutes or less, providing you with a quick and efficient service.

By working with us, most businesses see a 10-20% higher payout compared to working with a CPA who may be less familiar with the intricacies of the ERC program. Our goal is to help you maximize your credit while minimizing your upfront costs.

You should choose The Relief Consultants over a CPA for ERC filing for several important factors:

1. Specialized expertise: The Relief Consultants focuses solely on the ERC program, navigating its complexities to maximize your credit.Payroll experience: With decades of payroll experience, we can effectively process the ERC, which is claimed through payroll returns rather than business income tax returns.

2. Overcoming underutilization: Many CPAs don't process the ERC unless they handle payroll in-house, leading to the credit being underutilized.

3. Referrals from CPAs: A large portion of our clients are referred by CPAs who recognize our specialized expertise in the ERC.

4. Navigating complexity: The ERC tax code spans over 200 pages, requiring significant time and expertise to maximize the credit effectively.

By choosing The Relief Consultants, you can leverage our specialized knowledge and experience to secure the maximum ERC benefits for your business.

Yes, you can claim the ERC even if you received a PPP loan. The Taxpayer Certainty and Disaster Tax Relief Act of 2020 amended the ERC rules to allow businesses with PPP loans to claim the credit. However, you cannot use the same wages for both PPP loan forgiveness and the ERC.

When processing your ERC credit, we carefully analyze and allocate wages between the two programs to ensure compliance and maximize your benefits.

Yes! There are two possible ways to qualify for the ERC: revenue reduction or a "full or partial shutdown of your business due to COVID-19".

The IRS describes the latter as "A government authority required partial or full shutdown of your business during 2020 or 2021. This includes your operations being limited by commerce, inability to travel, or restrictions on group meetings".

Here are some examples of qualifying events:

Example 1: A restaurant has to close or limit its on-site dining, such as closing every other table, due to COVID-19 restrictions.

Example 2: A business that needs to meet with clients in person has to cancel meetings due to COVID-19 restrictions.

Example 3: A business has to reduce its operating hours because of COVID-19 restrictions and cleaning requirements.

Example 4: A business experiences delayed production timelines caused by supply chain disruptions.

Example 5: A business has to cancel a planned event or restrict the number of attendees due to COVID-19 restrictions.

No, the ERC funds will not run out. The Employee Retention Credit is a refundable tax credit, not a lending program. This means that the funds are issued directly by the U.S. Treasury as tax refunds. As long as your business qualifies for the credit and submits the necessary documentation within the specified deadlines, you will receive the funds you are eligible for.

The eligibility of owners' wages and the wages of their employed family members depends on the ownership percentage:

1. If an owner has a majority ownership (more than 50%), their wages do not qualify for the ERC.

2. W-2 wages paid to immediate family members of a majority owner (more than 50%) also do not qualify.

3. If an owner has less than 50% ownership, their W-2 wages can qualify for the ERC.

4. W-2 wages paid to immediate family members of an owner with less than 50% ownership can also qualify.

In summary, the ERC eligibility of owners' wages and the wages of their employed family members is determined by the ownership percentage, with the 50% ownership threshold being the key factor.

The process of claiming your ERC credit involves submitting required documents for a complimentary analysis, which usually takes 2-3 weeks from start to finish. If you decide to proceed, you select your payment option, and we file your claim.

Once filed, the IRS processes and releases refunds based on their current backlog, with a minimum turnaround time of 20 weeks. Therefore, the total timeline for receiving your ERC credit payment depends on the efficiency of the initial process and the IRS's processing time, which may take several months due to the current backlog.

The Employee Retention Credit (ERC) is not considered taxable income for federal income tax purposes. However, it's important to note that you must reduce any wage expenses you claim as deductions on your federal income tax return by the amount of the ERC credit you receive. This adjustment ensures that you don't receive a double benefit by claiming both the credit and the wage deduction.

To maintain accurate records and ensure proper reporting, it's crucial to provide your CPA with the information regarding your ERC credit. They will need this information to make the necessary adjustments on your tax return and ensure compliance with IRS guidelines.

Yes, the ERC funds you receive will need to be reported on your income tax return.