What is the ERC?
The Employee Retention Credit (ERC) is a refundable tax credit against certain employment taxes and qualified wages an eligible employer paid to employees between March 12, 2020, and September 30, 2021. The credit was authorized as part of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) as a way to encourage companies to keep employees on the payroll by making it easier for them to do so.
The 2020 ERC program offers a refundable tax credit of up to $5,000 per employee in 2020. For 2021, the program has increased to 70% of up to $10,000 in wages paid per employee per quarter for the first, second and third quarters, which totals up to $26,000 per employee. The average award is around $16,000 per employee.
Who Qualifies for the ERC Program?
Businesses and 501(c) organizations that had operations suspended or limited during the pandemic or that meet certain economic tests qualify for the ERC Program. Organizations with 500 or less full-time employees can consider all employee compensation (wages/health) for all employees. For those businesses over 500 employees, special rules regarding which employees are eligible may apply limiting the compensation to those employees paid who were inactive during suspended or limited operations.
How much does pursuing an ERC claim cost?
Your company pays nothing until and unless your company is paid. At the time your ERC calculation is submitted to the IRS an invoice is generated which will be due from your company to our firm when your company receives the funds from the IRS. If your claim is not paid, your company owes nothing.
What is the process and how long does it take?
Once we receive your contact and initial intake information, we will review the answers and schedule a time to speak with a company representative. After we receive all documentation we need from you, we will send a claim package for your signature and submission.
In most cases it takes us 4-8 weeks to prepare the claim and submit it to the IRS. Payment usually takes 4-6 months after submission, but processing times with the IRS tend to increase with the amount of claims submitted.
Why use Yates Anderson?
Our firm and our associated co-counsel are highly experienced in the evaluation, processing and handling of economic claims for businesses with years of experience handling sensitive data for thousands of businesses. Based on your information, we offer our clients an efficient and accurate process to determine if your business qualifies and how much it should receive based upon current rules applicable to the ERC Program.