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As a business owner, you’ve been through a lot over the past three years. The COVID-19 pandemic presented unprecedented challenges for companies of all sizes. Despite the difficulties, you’ve managed to keep your doors open and your employees on the payroll. Now, there’s an opportunity to get some financial relief with the Employee Retention Credit (ERC). But you haven’t yet applied? What’s causing your hesitation?
You Kept Your Employees Through The Pandemic
First, it’s important to acknowledge the hard work and dedication that went into keeping your employees on the payroll during the pandemic. It wasn’t easy, but you recognized the value of your team and the impact that layoffs would have on their lives. You found ways to adapt, whether it was shifting to remote work, reducing hours, or finding new revenue streams.
Now, the ERC is a way to reward your commitment to your employees. The credit is designed to incentivize businesses to keep their workers employed during the pandemic. It can be a valuable source of relief for companies like yours that have been negatively impacted by the pandemic.
Benefits Of The ERC
The ERC offers a significant tax credit to eligible businesses. The credit is a percentage of eligible wages paid to employees, up to a maximum of $26000 per employee. This means that if you have ten eligible employees, you could potentially receive a credit of up to $260,000.
The credit is retroactive to March 12, 2020, which means that you can claim it for wages paid during the entire pandemic. It’s also available to businesses that received PPP loans, although there are some restrictions.
One of the most significant benefits of the ERC is that it’s refundable. This means that if the credit exceeds your tax liability, you’ll receive a refund for the difference. It comes as one check per quarter from the IRS to the business owner. This can be a valuable source of cash flow for businesses that are struggling.
Why Don’t You Pull The Trigger?
Despite the benefits of the ERC, you may be hesitant to apply. There are several reasons why you might be holding back.
First, there’s the fear of the unknown. The ERC is a relatively new program, and there’s a lot of information to navigate. You may be unsure of your eligibility, or you may not know how to calculate your credit.
Second, there’s the fear of the application process. Applying for any government program can be daunting, and the ERC is no exception. You may be worried about making a mistake on your application or not providing the right documentation.
Third, there’s the fear of the consequences. If you apply for the ERC and are later found to be ineligible, you could be subject to penalties and interest. This can be a scary prospect for any business owner.
How To Apply?
Despite these fears, applying for the ERC is a relatively straightforward process. To get started, you’ll need to determine your eligibility and calculate your credit.
Eligibility for the ERC is based on several factors, including the size of your business, the impact of the pandemic on your operations, and whether you received PPP loans. The best way to determine your eligibility is to review the IRS regulations. Here at DUB Financial, we have an online questionnaire that helps you determine how you may be eligible.
Once you’ve determined your eligibility, DUB Financial is here to calculate your credit. For the entire period from Q2 2020 to Q3 2021, you will need to submit a detailed payroll report, PPP information, and your filed form 941, which is the quarterly payroll tax return. We make the process simple and easy to help you claim this valuable tax refund.
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