In these challenging times, U.S. small businesses have faced unprecedented obstacles due to the COVID-19 pandemic. From manufacturing to hospitality, restaurants to home healthcare, businesses in every sector have been grappling with public health concerns. This is precisely why the Employee Retention Credit (ERC), introduced by the IRS through the CARES Act, was created – to reward and provide relief to those businesses that persevered by retaining their employees during these trying times.
At Smart ERC, a subsidiary of Pinnacle Minds Inc., we’ve been assisting small businesses with various government programs for over 18 years. To ensure we provide the best service possible, we’ve brought on board former IRS agents who possess the knowledge and exclusive experience needed to guide small businesses through the complex ERC process. Now, let’s dive into the specifics with one of our former IRS agents, Tony, who has processed hundreds of ERC files during his tenure at the IRS. He’s here to unveil the seven key steps to help you file for the ERC successfully.
Former IRS Agent Tony:
Today, I’m here to demystify the often complex and misunderstood Employee Retention Credit (ERC). We’ll cover who can qualify, how to qualify, and everything in between. So, let’s get right into the seven essential keys to accessing your money.
The Employee Retention Credit (ERC) was established by the United States Congress as part of the CARES Act to aid U.S. small businesses in recovering lost revenue due to the COVID-19 pandemic.
Considering the loss of revenue, escalating costs, constant news of layoffs, and the looming uncertainty of a recession, it’s now more crucial than ever to equip yourself with knowledge about IRS Tax Credits that can fortify your small business financially. While the program has officially ended, businesses, both small and large, still have the opportunity to maximize the ERC for the period between March 12, 2020, and the end of September 2021.
Who Qualifies for the Employee Retention Credit?
Surprisingly, most employers and small businesses are eligible for this IRS credit. Eligible employers can claim 50% of $10,000 in 2020 ($5,000), and 70% of $10,000 ($7,000) for the first three quarters in 2021. This adds up to a maximum of up to $26,000 per employee. However, there are several qualifications you must understand to claim your highest ERC potential:
- The business must have experienced reduced hours or temporary closures due to government orders.
- Some businesses that don’t meet the above criteria may still be eligible if they experienced a significant decrease in gross profits during the specified dates.
- Wages and benefits paid after March 12, 2020, are eligible for compensation.
- Businesses can claim credit on wages not already covered by the Paycheck Protection Program (PPP). Businesses that closed but continued operations remotely through telework do not qualify for the ERC.
- Essential companies are not eligible unless they experienced significant disruptions in goods and materials necessary for business operations.
The IRS recently enacted the “Complex Qualifiers” law, which many CPAs are not aware of, making it difficult for them to help you qualify under these new regulations.
This expanded IRS law has enabled our former IRS experts to secure over 3 times the ERC funds that our clients’ own CPAs have obtained. Our experts understand how to qualify you under these new regulations.
How to Apply for the ERC
To file a claim with Smart ERC, you need Tax Form 941-X. Previously, employers could file Tax Form 941 as late as April 30, 2021. However, that date has passed. Therefore, all employers must file Form 941-X to amend and update their tax returns. Employers have up to three years from the date they submitted their tax return for that year to make this claim. This means you still have time, but the deadline is approaching rapidly.
We strongly recommend starting the application process and tax forms as soon as possible, preferably with an experienced ERC company that can handle these intricate files.
We are the only ERC company with a team of former IRS agents and tax attorneys who are ready to assist you in preparing and processing your claim. Our insider experience and knowledge about the ERC tax system allow us to maximize your credit, often delivering compensation faster than other methods.
Moreover, we save you both time and money with our zero upfront fees and 100% accurate estimates. Our experts have processed thousands of these files while working at the IRS, and they are now at your service.
It’s worth noting that the United States Congress has already reduced ERC credits from up to $33,000 per employee to $26,000 per employee. So, it’s crucial to act now with SmartERC’s exclusive former IRS agents before Congress further reduces or cancels the program.
As a business owner, you’ve worked tirelessly during the pandemic and beyond. Now is the time to claim the money you’ve earned.
We hope you found this information valuable!
Stay tuned for our next installment, where we will break down how to calculate your ERC for your business.
To have our expanded team of former IRS agents determine how much ERC you qualify for before the deadline for FREE, click here. Or, you can reach us 24/7 by calling 800-707-0524.