ERTC | NCLocalBusiness.com

The ERTC Experts

Maximize your refundable claims for the Employee Retention Tax Credits with a simple process that requires less than 15 minutes of your time.

See If You Qualify

The Employee Retention Tax Credit

The United States government has authorized unprecedented stimulus. Your business could qualify for up to $26,000 per employee!

FUNDED BY THE CARES ACT

The ERTC was established by the Coronavirus Aid, Relief, and Economic Security (CARES) Act, and provides a credit equal to 50 percent of qualified wages and health plan expenses paid after March 12, 2020 and before Jan. 1, 2021. A per-employee $10,000 maximum of qualified 2021 wages (Q1, Q2, Q3). That is a potential of up to $21,000 per employee!

FULL AND PART TIME W-2 EMPLOYEES

The 2020 ERC Program is a refundable tax credit of 50% of up to $10,000 in wages paid per employee from 3/12/20-12/31/20 by an eligible employer. That is a potential of up to $5,000 per employee. In 2021 the ERC increased to 70% of up to $10,000 in wages paid per employee per quarter for Q1, Q2, and Q3. That is a potential of up to $21,000 per employee. Startups eligible for up to $33,000.

NOT A LOAN. NO REPAYMENT

While the ERTC was created in the CARES act along with the PPP Loans - this is not a loan, there is no repayment. There are no restrictions for what recipients of the credit must use the funds. However, there are complicated steps to follow and qualification is not all that straight forward. Take our simple, free, questionnaire!

FREE, NO OBLIGATION PRE-QUALIFICATION

By answering a few, simple, non-invasive questions, you can determine if your business will likely qualify for a no-strings-attached tax credit. There is no cost , upfront fees, or obligation to be pre-qualified. If your business doesn't qualify, you don't pay. CPA fees to process your claim and handle the complex process, and file audit-proof documentation for IRS support are 100% contingent on the your refund -- are are paid from the refund.

Common Questions Answered

The United States government has authorized unprecedented stimulus. Your business could qualify for up to $26,000 per employee!

What is the ERTC and how is it different from PPP?

The Coronavirus Aid, Relief, and Economic Security Act (also known as the CARES Act) was signed into law on March 27, 2020. It included two programs to assist businesses with keeping workers employed: the Payroll Protection Program (PPP) administered by the Small Business Administration and Employee Retention Tax Credit (ERTC) administered by the Internal Revenue Service.

PPP funds are distributed based on 2.5 months of payroll and a minimum of 80% of the funds must be used on payroll to be eligible for forgiveness. Additionally, PPP funds are not taxable as revenue and you may still take deductions for the payroll covered by PPP.

ERTC tax credits, however, are credits (or refunds) for a percentage of payroll in each quarter that you qualify. There are specific rules for determining eligibility by quarter, and limiting the dollars that can be claimed for each employee.

My business received PPP. Can I also get ERTC?

Initially with the CARES Act, employers could choose to apply for PPP or claim ERTC credits, but not both.

PPP was more beneficial than ERTC for most businesses (for reasons we won’t go into here) and so most businesses with under 500 employees received forgivable PPP Loans.

On March 11, 2021, The American Rescue Plan Act of 2021 was signed into law and included many modifications and expansions to existing elements of previous stimulus programs.

Noteworthy modifications for business owners included:

Businesses who applied for and received PPP funds could now also claim ERTC credits.ERTC credits could be retroactively claimed for businesses that qualified in 2020.ERTC credits were extended through 9/30/21 with lower qualification requirements.The per-employee cap on qualifying wages increased from $10,000 for all of 2020 to $10,000 per quarter for the first 3 quarters of 2021.The refundable credit amount increased from 50% of qualifying wages in 2020 to 70% in 2021.So the short answer is “Yes” . . . you can claim ERTC even if you received PPP funds.

How do I apply for ERTC?

Unlike the Payroll Protection Program (administered by the Small Business Administration), there is actually no “application process” for the Employee Retention Tax Credits.

You simply claim the ERTC tax credit like you would any other tax credit – by asserting to the IRS that you can legally claim the credit.

When you claim a child tax credit, you do so by asserting this fact on your Form 1020 Personal Income Tax Return.

The difference is that when you claim an ERTC tax credit, you do so on your Form 941 Employer Quarterly Tax Filing.

For prior quarters, you must file an amended form (the Form 941-X) to reduce your current quarter’s tax contribution and request a refund of excess credits (which is highly likely).

Another perk of ERTC, is that since you can often estimate these credits in advance of distributing cash for payroll, you can file a Form 7200 to receive a cash advance to avoid waiting until the end of the quarter to apply for the refund.

Can I qualify if my Q1 2021 revenue was back to pre-pandemic levels?

Even though you may feel like revenue is back to normal, there are some items you want to consider before passing on this ERTC assessment.

First, even if revenues have returned to “normal” in 2021, you may have qualified in 2020 and you can retroactively claim those credits. That eligibility criteria in 2020 was based on revenue declines from 2019, or if your business was partially or fully closed due to governmental mandate.

Second, while your revenue may have returned to “normal” in Q1 2021, remember that we are comparing your Q1 2021 to Q1 2019. If 2019 was a year of growth for your business, then your revenue levels 2 years ago may have been much less than Q1 2020.

And lastly, if your revenues were down in Q4 2020 by just 20% compared to Q4 2019, then you may also be eligible for Q1 2021. There is a safe harbor provision that few advisors are talking about, and it means that many businesses are qualifying for $7,000 per employee in Q1 2021.

I know, it seems too good to be true, but the government wants to incentivize and reward you for keeping US residents employed and money flowing through our economy as we rebuild bigger and stronger than before.

Does ERTC have to be re-paid?

You are most likely referring to a provision of the CARES Act that allowed employers to defer the deposit and payment of the employer’s share of Social Security taxes. Those deferrals must then be repaid – with at least 50% of the balance due by 12/31/21 and the remaining balance due by 12/31/22.

ERTC credits are NOT a deferral. They are dollar-for-dollar credits against wages you’ve paid. Not taxes you’ve paid, but actual wages.

These credits can offset future tax contributions or you can receive a refund check – it’s your choice.

And you will NOT have to re-pay these funds (unless, of course, you don’t provide adequate documentation in the course of an audit).

Why isn't my bank or CPA talking about ERTC?

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Shouldn't my payroll service provider be on top of this?

Your Payroll Service does an excellent job of executing the fundamentals of paying your employees, paying your employment taxes and filing your quarterly reports.

But computing your ERTC credits requires visibility into your P&L and PPP forgiveness applications. Not only that, but the complex requirements around eligibility and allocating ERTC credits at the employee-level while accounting for annual and quarterly qualifying wage gaps and . . . well, you can probably tell why Payroll Services are not offering to do all of this for you.

The Payroll Services that we’ve worked with so far are happy to provide the payroll registers that we need to perform the allocations. And they are happy to file the Amended Form 941-X with the IRS on our client’s behalf.

But that’s the extent of it.

In fact, most wise Payroll Services are asking clients to sign an indemnification waiver before submitting a Form 941-X because the Payroll Service can take no responsibility for the accuracy of the ERTC credits you are claiming.

For them to involve themselves in the intricacies of this calculation, it is a liability and beyond their scope of services.

Will my tax CPA handle this for me?

Whether your tax accountant is a CPA or EA, he or she most likely only prepares your Federal and State Income Tax Returns. However, ERTC credits are claimed against Employment Taxes on Form 941, and cash advanced through Form 7200.

The complexity of the ERTC program is a beast unto itself and every tax accountant we’ve talked to has said they focus on staying up-to-date on the ever-evolving income tax code, and they can’t now become experts in the ERTC program as well.

If your tax accountant is comfortable determining your eligibility by quarter and year, computing your credits, and preparing contemporaneous documentation to support an IRS audit, then you should certainly let them handle all of this.

If you want a second set of eyes on this, we’re happy to take a look.

Can't my bookkeeper handle my ERTC claim?

Your Bookkeeper should certainly have access to all the information that is needed for an accurate calculation of your legal ERTC claim. They will have your financial reports, payroll registers, and PPP loan forgiveness documents. But do they have time?

Do they have the time to dig into the text of American Rescue Plan Act of 2021And its accompanying referenced laws like: CARES Act, Families First Act, Payroll & Healthcare Enhancement Act, PPP Payroll Flexibility Act and the Consolidated Appropriations Act. Time to read the IRS Interpretations and FAQ’s? And cross-reference those definitions with that of PPP which was separately defined and dissimilarly interpreted in the Small Business Administration’s Bulletins and IFRs? Do they have the time to ensure accuracy in eligibility determination, maximize your computation and create the supporting documentation you’ll need to support an IRS audit of employer taxes?

So far, we have not found a bookkeeper who is able to take all this on, while handling the day-to-day of bookkeeping. If yours can, then take them up on their offer. We’re happy to take a second look.

What are some sample actual results and tax credit amounts?

If you want a second set of eyes on this, we’re happy to take a look.

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