FAQ: Understanding The Employee Retention Tax Credit (ERTC)
The Employee Retention Tax Credit (ERTC) is a significant relief measure aimed at helping businesses recover from the economic impact of the COVID-19 pandemic.
However, it can seem daunting due to its complex regulations and guidelines.
Here are answers to some of the most frequently asked questions about the ERTC.
What is the Employee Retention Tax Credit?
The ERTC is a refundable tax credit designed to provide financial relief to businesses who kept their employees on payroll during the COVID-19 pandemic. The credit is a percentage of qualifying wages paid to employees during specified quarters of eligibility.
Who is eligible for the ERTC?
The eligibility for the ERTC extends to a wide range of businesses, including those that experienced significant declines in gross receipts, were subjected to full or partial shutdown orders, or faced hardships due to capacity restrictions or supply chain disruptions during the pandemic. This includes non-profit organizations and start-ups during specified quarters.
The criteria also takes into account the size of the business. Businesses with less than 100 full-time employees may qualify for specific quarters in 2020 and those with less than 500 full-time employees qualify for quarters in 2021.
The good news is there’s no limit on the amount of part-time employees you have, though the qualifying wage amounts may vary.
How can businesses claim the ERTC?
Claiming the ERTC involves filing an amended employment tax return (Form 941-X) with the Internal Revenue Service (IRS).
Given the complexity of the rules and the documentation required to support eligibility, many businesses opt to enlist the help of professional accountants or tax consultants to navigate the process.
Can businesses that received PPP loans also claim the ERTC?
Yes, businesses that received Paycheck Protection Program (PPP) loans can also claim the ERTC. This became possible due to modifications introduced by the American Rescue Plan Act of 2021.
What is the benefit of hiring a professional accountant for ERTC claims?
The complex eligibility rules, the intricacy of tax laws, and the risk of potential audits make the ERTC claim process challenging. Professional accountants offer expert guidance, ensure accurate and compliant filings, help maximize the credit amount, and provide valuable support in the event of an IRS audit.
How long will it take to receive my refund after claiming the ERTC?
The timeline to receive your refund after claiming the ERTC can vary, typically taking 6 to 9 months. This depends on factors like the IRS's current processing times and the complexity of your claim.
Professional accountants can often help expedite this process by ensuring that your claim is accurate and complete when it's submitted.
What happens if my business is audited after claiming the ERTC?
In the event of an IRS audit, you'll need to provide documentation supporting your eligibility for the ERTC and the calculation of your credit amount.
This process can be considerably less stressful with the support of a professional accountant who can guide you through the audit, provide necessary documentation, and handle interactions with the IRS.
Personalized ERTC Filing Support
ERTC.com is your go-to solution to file your amended returns for the Employee Retention Tax Credit (ERTC).
Because navigating the ERTC process can be daunting.
Which is why we provide an assigned team member to answer your questions and guides you throughout the filing process.
With personalized support you'll never feel alone.
We’re a dedicated team of over 3,200 professionals across the nation, ready and eager to help you unlock the funding you deserve. We’ve already helped over 19,000 businesses, with over $1.3 billion in refunds affecting 401,352+ eligible employees.
The deadline to file is approaching.
Go to www.GetERTC.win and get your refund estimate today.
Your Next Step:
Get your "Special Report: Guide To The Employee Retention Tax Credit" here. Get equipped with knowledge. Our comprehensive report provides everything you need to smoothly navigate the complexities of the ERTC — helping your business rebound stronger post-pandemic.