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In its simplest form, the Employee Retention Tax Credit (‘ERC”) is a reward for business owners who retained their W-2 employees throughout qualifying quarters of the COVID-19 pandemic. The ERC functions as a Federal COVID Relief Fund that was enacted under a 1.9 trillion-dollar stimulus package to expedite economic recovery.
Initially, the ERC was introduced under the Coronavirus Aid, Relief, and Economic Security Ave (CARES Act) but was difficult for business owners to obtain given its strict PPP rules, limitations on the numbers of employees a business owner could have, and revenue reduction requirements. As a result, many business owners chose to utilize the PPP program because the process was easier and faster.
The ERC has undergone significant change since its inception. In early 2021 an adjustment to the ERC program made it possible to apply for both PPP and ERC. The change has been overlooked for two reasons:
1. The changes took effect in January of 2021. A very hectic time period for our country. As a result, the media did not cover the change as they normally would have. Because if this, most business owners missed out the beneficial changes.
2. Additionally, the business owners or accountants who did know about the change assumed that their business or clients would not qualify based on outdated requirements (decline in revenue).
But, what most people, including CPAs, do not understand is the “business interruption” clause. The clause enables a skilled tax attorney, like Ted Forman to fight to qualify your business. Thus, even if your business grew or was essential, you can still qualify for the ERC if your business suffered an adverse impact as a result of the pandemic. These adverse impacts include:
Interrupted Business Operations, Supply Chain Interruptions, Inability to Access Equipment, Limited Capacity to Operate, Inability to Work With Vendors, Suppliers, or Manufacturers, Reduction is services or goods offered to your customers, cut down in your hours of operation, shifting hours to increase sanitation of your business, partial shutdown, or full shutdowns.
Forman Law Offices will analyze your business, calculate the credits you are entitled to, and file your application for the credit at no upfront cost to you. The only fee you will pay is if our firm is able to qualify your business for the Tax Credit. If we don’t, you don’t owe us anything. This is truly at no risk to you. Don’t mistakenly disqualify yourself, let our professionals evaluate your case and provide you with an answer.