Most US small businesses have not yet claimed their Employee Retention Tax Credit (ERTC or ERC), which provides COVID-19 relief funding to businesses. The majority have claimed the Paycheck Protection Program (PPP) funding, but are unaware that they are able to claim the ERTC funding as well. These programs are part of the American Rescue Plan Act of 2021, which provides help to businesses that were financially impacted by the COVID-19 pandemic.
Originally, businesses had to choose between the PPP or the ERTC programs. Most businesses opted for the PPP program due to its simplicity in applying and avoided the more complex ERTC application process. In 2021, the American Rescue Plan Act of 2021 changed. It allowed businesses who had already applied for and received PPP funding to also claim the ERTC credits. They could claim retroactively if they qualified and there were lower qualification requirements.
In summary, businesses who claimed PPP loans previously, may still have sufficient payroll to receive the ERTC funding as well.
The ERTC is not limited by the number of employees in a business. To qualify for the credit, a business must have had its operations negatively affected by federal, state, local government, or regulatory orders due to COVID-19 or have had a reduction in revenues due to the pandemic.
There are many different ways a business is considered to have been subject to a partial shutdown. Two of the most common examples are situations where operational hours are reduced or supplies are delayed due to government orders. Others include capacity restrictions, supply chain disturbances, travel restrictions, commercial disruptions, group gathering limitations, full or partial shutdown, customer or jobsite shutdown, remote work orders, or customer or vendor restrictions in at least one financial quarter, or they must have had a reduction in revenues due to the pandemic.
Most businesses (and charities) are unaware that the ERTC program is not only for businesses in distress. It is meant to encourage businesses and charities to retain existing employees and hire new ones to help weather the economic costs incurred by COVID-19. A broad range of businesses are great candidates for the ERTC, including restaurants, manufacturing, construction, food industry, healthcare, charities, and tax exempts such as churches, museums, food kitchens, schools, and many more.
In an article in Forbes on February 15, 2022, Dean Zerbe writes, “Small and medium businesses (as well as tax-exempts/charities) are leaving billions of dollars on the table.”
Under the ERTC program, businesses with full-time employees (W2) between 2019 and 2021 may claim up to $26,000 per employee. These funds do not have to be repaid and can provide significant funding for the business with no requirement as to how the business spends the money.
Most accounting firms are unwilling to process ERTC claims on behalf of their clients due to the complexity and time involved as they are already too busy with their existing workloads.
ERTC Experts specialize exclusively in preparing, maximizing, and filing ERTC claims while simplifying the process for employers.
To get started, a business simply completes a short intake form on their website at: https://claimertc.tax.
Once a business uploads their information to a secure portal, a dedicated team of CPAs will assess the business’s eligibility and the amount that they can claim. The business receives an initial ERTC estimate at no cost. Once the business is ready to proceed, the team will prepare and file the documents with the IRS. Businesses are billed a low percentage of the claim, which may be deducted from the proceeds.
The IRS will process the credit and mail a check to the business. The entire process is safe and secure, with all sensitive information protected.
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Disclaimer: The views, suggestions, and opinions expressed here are the sole responsibility of the experts. No Daily Pune journalist was involved in the writing and production of this article.