The Employee Retention Credit or ERC is a nonrefundable credit that the government decided to render to the employers who faced huge blows during the pandemic. The ERC is a part of the CARES Act. If you think you won’t qualify for ERC, then you will be surprised by the number of organizations benefiting from the ERC. It aims to offset employment taxes paid by employers to offer relief for the pandemic situation.
The ERC helps employers to keep their staff. It helps to offset the employer’s costs and also preserve the job. The ERC is calculated on quarterly tax returns and relieves the employers by minimizing the employment tax deposit. Click here to learn more.
People’s five common misconceptions about ERC have prevented employers from filing an appeal
- Afraid that they will not be eligible as their payroll is their owner’s payroll.
- Assumes that they will qualify as their income was not down by 50% compared to the revenue of 2019.
- Often the employers who have taken a PPP loan think they will not be qualified.
- Often relies on the tax preparator, CPA, or payroll processor. The employers think the individuals would have informed them if they were eligible.
- Employers assume that they won’t qualify as their business did not close.
What can you do?
It is not too late if you have not filed for PPP yet. Call a tax attorney immediately and have a word with them on how to get into the process. The tax lawyers will help the business to claim their payrolls based on tax incentive. You can not carry the whole process alone. You will require a tax professional who, on your behalf, will apply for the ERC and see that you match all the criteria laid for the eligibility of the ERC and other insensitive base taxes. By claiming the taxes, you will do it for yourself and your employers.
Also read: Outsourcing Basics: When and When Not to Outsource?
What are the other functions of tax professionals that might help your business?
Tax professionals will be a boon for you whether your business is a large-scale or a small business. They take all the financial responsibilities all around the year. They will help you in saving time and money, help you to pull together all the records, and help you get audited. So do not wait for too long to hire a tax professional.