With taxation we’re here to talk to you about the employee retention credit again and to espouse the benefits that are out there for many of the businesses that have been impacted by the pandemic what we’re noticing that tax professionals are missing these credits for their clients and they should take advantage of the ERC Credit 2021.
. They’re not able to determine that the clients are eligible because they believe that if they haven’t lost money during the pandemic then they aren’t eligible for the credit. That’s just simply not the case and the credit is up to thirty three thousand per W-2 employee. That’s a refundable credit that’s cash in your pocket. That’s something to look for so we want to make sure that everyone is looking out for it and if it’s possible to help you get the credits we’re happy to do so.
The first misconception that professionals have is that if you were eligible for a ppp loan, and you got forgiveness on that loan, you are not eligible for the employee retention credit. This is false. If you received ppp funds you are still able to get the employee retention credit for ppp. You aren’t able to double dip wages with ERC but that doesn’t mean that you can’t use both programs to maximize both credits.
For example if somebody makes twenty thousand dollars per quarter or eighty thousand dollars a year, for that quarter you can use ten thousand dollars of wages toward the ERC credit, and ten thousand dollars toward ppp forgiveness.
This is going to maximize both credits and give you the most dollars in the bank. You cannot double dip with ppp and ERC funds meaning that you cannot use funds that are used to claim the employee retention credit to apply towards ppp loan forgiveness. This is why it’s important to find an expert to help you calculate the maximum possible credit, while still achieving ppp loan forgiveness.
Another common misconception that we find that people are realizing about ERc is that if your income went up, or has not significantly decreased, you are not eligible for the ERC Credit 2021.
So there is a revenue component where you can be eligible if your revenue went down 50% in 2020 or 20% per quarter, quarter over quarter, in 2021. You are eligible for ERC?
However, that’s not the only way. Another opportunity for ERC is whether or not your business was substantially impacted by a government shutdown. So what does that mean if your business is broken up into multiple components?
For example, a restaurant you have indoor dining, you have takeout… If indoor dining represents more than 10% of your revenue historically and indoor dining was impacted by a government shutdown or government orders forcing you to socially distance, and limiting the capacity of your dining room by 50%, you’re now eligible for the employee retention credit. Despite the fact that, say, your takeout sales went through the roof and you’ve actually done pretty well during the pandemic. This is an opportunity that professionals are missing and not looking through carefully.
Another example is a manufacturer can qualify for the ERC Credit 2021, employee retention credit because of a disruption in its supply chain. If a vehicle manufacturer has a supplier of carburettors that was shut down entirely due to a government order. Because of that the vehicle manufacturer’s supply chain was disrupted and they could not complete their vehicles for production and sale.
A law firm that primarily specializes in litigation may qualify as well. As the courts were closed for a good part of 2020 and 2021 this would impact the law firm more than 10 percent of its revenue typically derived from litigation costs. Directly going to court was impacted and therefore they’re now eligible for the credit.
A lot of professionals are missing these types of eligibility criteria because they’re not realizing that if your income went up, or didn’t significantly decrease, that you’re eligible for these credits.
Check to see if your business is eligible for the ERTC.
Complete the brief form and our experts will quickly take a look and see if you are due a refund.
We can easily answer any questions about whether or not you are eligible or able to maximize these credits. Check the information on our ERTCWizard home page.