Top ERC/ERTC Providers
Pros & Cons
If your business is eligible for the advance payment option, you could receive your tax refund within five business days
No upfront or hidden fees
Team of qualified experts with decades of combined experience
Businesses could receive 15% to 25% more than with competitors
Fee structure isn’t clearly outlined without speaking with someone
Limited time in business
What is The Employee Retention Credit (ERC)?
The Employee Retention Credit (ERC, or ERTC, T stands for tax) is a stimulus program in the form of tax credit that was created by the Coronavirus Aid, Relief, and Economic Security (CARES) Act. The payroll tax refund initiative was designed as a way to help businesses keep their employees on the payroll during the COVID-19 pandemic.
The ERC is separate from the Paycheck Protection Program (PPP), which is a loan program that provides SMBs with funding to cover payroll and other expenses.
The ERC is a refundable tax credit, meaning businesses can claim it even if they don't owe any taxes. It is a grant, not a loan, and does not need to be repaid.
The ERC is available to businesses of all sizes, including sole proprietorships, partnerships, corporations, and nonprofits. While the ERTC officially concluded on October 1, 2021, businesses can still pursue a retroactive ERTC refund by filing Form 941-X.
Is My Business Eligible for The ERC?
To be eligible for the ERC, businesses must meet the following criteria:
- They must have been in operation on February 15, 2020.
- They must have had a significant decline in gross receipts during 2020 or the first three quarters of 2021.
- They must have kept their employees on the payroll during the period of the decline in gross receipts.
Whose eligibility is determined when considering employees?
Companies with 100 or fewer full-time employees are eligible for the program, considering all of their employees, regardless of their active service during the designated period. In contrast, for companies with over 100 employees, only full-time employees who are being compensated but unable to provide service due to shutdowns and/or a decline in gross receipts are taken into account for eligibility purposes.
Top ERC Providers
How Much Money Can I Get Back Through The ERC Program?
The amount of the ERC is based on the number of employees that a business kept on the payroll and the amount of wages that it paid to those employees. The refundable credit amount can reach up to $5,000 per employee for 2020 and $28,000 per employee for 2021, totaling $33,000. This significant amount can be claimed either independently or with the assistance of a specialized company.
How Do I Claim The ERC?
To claim the ERC, businesses must file Form 941/941-x with the IRS. This form outlines the federal tax income and other payroll taxes withheld each quarter. For eligible quarters in 2020 and 2021, each Form 941 consists of three pages. Form 941-X is utilized for correcting errors on a previously filed Form 941.
The amended return must include the following information:
- The amount of the ERC that the business is claiming.
- The number of employees that the business kept on the payroll during the time for which its claimed.
- The amount of wages that the business paid to those employees.
The following additional documents should also be included:
- Detailed Payroll Reports: including a comprehensive list of employees' names, payment dates, and gross wages.
- PPP Loan Application and Forgiveness: if you have obtained a PPP loan or gone through the forgiveness process, you will likely need the information used during the loan application.
- Basic Information about your Business: This should include pertinent details such as a description of your business, business and employee locations, and employee work hours (including any instances of reduced schedules).
Businesses can also claim the ERC on their original Form 941 if they meet the following criteria:
- They filed their Form 941-x by the due date (December 31, 2023).
- They have not yet received a refund for the first quarter of 2020.
For more in-depth information, see this official instructions document regarding form 941-x published by the IRS.
Should I Hire a Company to Help Me Claim the ERC?
Navigating the intricacies of the ERC tax code remains a challenge. The number of eligibility requirements and the process of calculating and filing a claim can be complex to many. Additionally, the ERC is a tax credit, so businesses must file a claim with the IRS. Many eligible businesses still fail to take advantage of this beneficial program. If you are not familiar with the ERC or the tax code, you may want to consider hiring a company to help you.
You are welcome to compare ERC companies in the list above, and let ERC tax experts help you through the process.
Here are some reasons why you might want to consider hiring a company to help you claim the ERC:
- The ERC has a number of eligibility requirements. Determining if your business is eligible for the ERC can be difficult. A company specializing in ERC can help you determine if your business is eligible and if you qualify for the maximum amount of credit.
- Calculating the ERC can be complex. The amount of the ERC that you are eligible for is based on the number of employees you kept on the payroll and the amount of wages you paid to those employees. A company that specializes in ERC can help you calculate the amount of credit that you are eligible for.
- Filing the ERC claim can be time-consuming. The ERC is a tax credit, so you will need to file a claim with the IRS. A company specializing in ERC can help you file your claim and ensure it is processed correctly.
What are the deadlines for claiming the ERC?
There are two important dates to keep in mind:
- The deadline for claiming the ERC for 2020 is December 31, 2023.
- The deadline for claiming the ERC for 2021 is March 15, 2024.
What are the benefits of the ERC?
The ERC provides a number of benefits to businesses, including:
- It can help businesses recover from the expenses of keeping their employees on the payroll during the COVID-19 pandemic.
- It can help businesses reduce their tax liability.
- It can help businesses save money.
The ERC is a valuable tax credit that can be obtained by businesses that kept their employees on the payroll during the COVID-19 pandemic. Businesses that are eligible for the ERC can claim it by the end of 2023.
By following the tips above, businesses can ensure they are eligible for the ERC and claim it correctly.
Finally, the IRS has a website with more in-depth information about the ERC. The website can be found at https://www.irs.gov/coronavirus/employee-retention-credit