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| Posted by Donesia - 01-23-2023, 01:10 PM |
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Can you help me with the ERC? YES! US Arbitration will file for you! We can also arbitrate most tax disputes if needed! ERC The Employee Retention Credit (“ERC”) continues to provide a wide variety of employers with lucrative refundable payroll tax credits for qualified wages paid to employees in 2020 and 2021. Businesses can still apply for the ERC by filing an amended Form 941X (Quarterly Federal Payroll Tax Return) for the quarters during which the company was an Eligible Employer. “We have helped hundreds of employers receive the ERC over the past two years since the credit was introduced. We have not seen a slowdown in application approvals by the IRS,” says Martin Karamon, principal at Cherry Bekaert who leads the Firm’s ERC Team. “Even though employers can only assess their Eligible Employer status from March 13, 2020, through September 30, 2021, we are seeing record numbers of our clients being approved to receive the ERC,” Karamon adds. “Unfortunately, many companies still have not evaluated whether they qualify for the four separate credits.” Check If You Qualify For ERC As we reach two years of ERC availability, Karamon and his team answer the most frequently asked questions about this payroll tax credit. Table of contents: • How does the Employee Retention Credit work? • Who qualifies for the Employee Retention Credit? • What are ERC qualified wages? • Are benefits of the Employee Retention Credit the same for large and small employers? • How do I calculate if an employer is a large or small employer for the Employee Retention Credits? • Is the Employee Retention Credit only for full-time employees? • What is the ERC eligibility / credit-generating periods? • Can I still apply for the Employee Retention Credit? • What is the interplay between wages included in the R&D Credit and wages utilized in the ERC Calculations? • Are most companies utilizing the Gross Receipts Test or the Government Mandate Test to reach eligibility for ERC purposes? • What is considered Gross Receipts for ERC? • If I qualify under the Government Mandate Test, does that automatically qualify me as an eligible employer for the entire quarter? • Do I take the ERC into income when I receive it? • Does the Employee Retention Credit have to be paid back? • How do I apply for the ERC? • How long does it take for the IRS to provide a refund after filing an amended Form 941X? • Can I get both the ERC and PPP Loan? • Do I need to file for PPP forgiveness before I file for the ERC? • Does PPP forgiveness count as gross receipts for ERC? • Can churches and other religious organizations qualify for ERC? • Do companies owned by Private Equity Funds need to aggregate their gross receipts and employee counts together when determining eligible employer status? • Who qualifies for ERC? • If I use a PEO instead of a traditional payroll tax provider, can I still claim the ERC? • What are examples that allow an automotive dealership to qualify for the ERC due to the effects of COVID-19 mandates limiting commerce, travel, or group meetings? • Does the Receipt of Payroll Tax Refunds under the ERC Trigger Title IX for Private Schools? How does the Employee Retention Credit work? The ERC is a refundable payroll tax credit that can be as high as $5,000 per employee in 2020 and as high as $21,000 per employee in 2021. Who qualifies for the Employee Retention Credit? Employers that experienced partial shutdowns due to government orders limiting commerce, travel or group meetings; or that experienced significant declines in quarterly gross receipts (as compared to their quarterly gross receipts in 2019) due to the pandemic are eligible employers under this program. What are ERC qualified wages? ERC credits are calculated based on the qualifying wages paid to employees during eligible employer status. For most companies taking advantage of this program, the refundable tax credits are well in excess of the payroll taxes paid by the employers. ERC benefits can be larger than the amounts a company received in PPP funding. Are benefits of the Employee Retention Credit the same for large and small employers? Small employers receive enhanced benefits under the ERC regime. Specifically, for the time they are an Eligible Employer, they can include wages paid to all employees. Large employers can only include wages paid to employees for not providing services. How do I calculate if an employer is a large or small employer for the Employee Retention Credits? • For the 2020 ERC, an employer with 100 or fewer average full-time employees (as measured in 2019) is defined as a small employer. • For the 2021 ERCs, an employer with 500 or fewer full-time employees (as measured in 2019) is defined as a small employer. • The term “full-time employee” means an employee who, with respect to any calendar month in 2019, had an average of at least 30 hours of service per week or 130 hours of service in the month (130 hours of service in a month is treated as the monthly equivalent of at least 30 hours of service per week), as determined in accordance with section 4980H of the Code. An employer that operated its business for the entire 2019 calendar year determines the number of its full-time employees by taking the sum of the number of full-time employees in each calendar month in 2019 and dividing that number by 12. Special rules apply to those who were not in business all of 2019. Is the Employee Retention Credit only for full-time employees? No. An employer may include wages paid to part-time and full-time employees in the calculation of the ERC. The only limitation on the calculation of the credits is that an employer may only calculate the credits on the first $10,000 of wages and health plan costs paid to each employee during each credit-generating period. What is the ERC eligibility / credit-generating periods? If eligible, employers can claim the ERC for qualified wages paid in 2020, as well as Q1, Q2 and Q3 of 2021. Can I still apply for the Employee Retention Credit? Yes. The statute of limitations for the 2020 ERC does not close until April 15, 2024. The statute of limitations for the 2021 ERCs does not close until April 15, 2025. For 2020 credits, the return would have been due April 15, 2021, so given the 3 year statute of limitations April 15 2024, |