Employee Retention Credit
Take advantage of the Employee Retention Credit
Many small businesses were negatively affected by COVID-19. The Employee Retention Credit (ERC) was developed to compensate for retaining employees even when business slowed down. Part of the 2020 CARES Act and extended by the Taxpayer Certainty and Disaster Tax Relief Act, the ERC encouraged businesses to keep employees on their payroll by offering a tax credit of up to $26,000. Choose the CPA experts at Benny C. Phillips to help business owners like you take advantage of this credit.
Does Your Business Qualify?
You can qualify for the credit based on wages paid in 2020 and 2021, event if you were a start-up. There are two ways to qualify for the Employee Retention Credit (ERC):
• Your business suffered a major revenue drop in 2020 or 2021 because of the COVID pandemic.
• Your daily operations were affected by restricted business from a mandate or supply chain interruption.
Employers can claim up to $26,000 per employee. The claim process is complicated, and often requires filing amended tax returns. Partner with Benny C. Phillips rather than doing it yourself or trusting a third-party company.
Working With Benny C. Phillips
You have a business to run. Claiming your Employee Retention Credit is a multi-step process. It can be difficult to even calculate whether you qualify, and there are sever penalties for mistakes. Our CPA team has the skills and experience to do this right, from determining your eligibility to filing clams and amended tax returns. Contact us today to determine if your business qualifies.
Beware of Third-Party ERC Schemes
Use a reputable firm like Benny C. Phillips to help you claim your Employee Retention Credit. As the IRS noted in this article, avoid companies that:
- Only file claims – just one part of the process
- Charge a percentage of your credit – not aligned with your interests or effort required
- Don’t have an established track record – still available years from now if you’re audited
Benny C. Phillips will be there with you every step of the way – now and in the future.
Contact Us Today!
Want to know more about the Employee Retention Credit and how you could benefit from it? Contact Benny C. Phillips today!
Frequently Asked Questions
We know you have questions, and the Benny C. Phillips team is here to help. Here are some of the questions we’re often asked about ERCs. This is a very complicated process, and your unique business situation may impact your eligibility. There are additional details and requirements that we can discuss with you during your complimentary ERC consultation.
Eligibility requirements are complicated, but you must meet these two criteria:
- Employer eligibility – You must have carried on a trade or business during 2020 or 2021, and experienced a full or partial suspension of operations, or substantial decline in revenue, during any calendar quarter due to COVID-19.
- Employee eligibility – You must have paid qualified wages to one or more employees during the period in which your business qualified for the ERC.
Receiving a Paycheck Protection Program (PPP) loan may impact your eligibility for the Employee Retention Credit. Simply put, you cannot use the same wages to calculate both the ERC and PPP loan forgiveness. EIDLs don’t typically impact ERC eligibility.
The ERC is calculated based on qualified wages paid to eligible employees during the period in which your business qualified for the credit. The credit is equal to a percentage of qualified wages paid during the calendar quarter, up to a maximum amount per employee.
- 2020 – 50% of up to the first $10,000 of eligible wages for the year
- 2021 – 70% of the first $10,000 of eligible wages for the first two quarters.
The amount of qualified wages that can be used to calculate the credit may vary depending on the size of the employer.
Benny C. Phillips can provide expert guidance on the complex tax rules and regulations surrounding the credit, help you calculate and claim the credit, file all paperwork and amended tax returns, and provide general tax planning advice. We are ERC experts today, and will be around years from now if the IRS decides to audit your ERC claim.
No. The ERC is a refundable tax credit.
Due to COVID and general IRS backlog, it may take months to receive your refund. While the IRS mentions four-to-six-week turnaround, we’ve seen situations where it may take up to six months. You can check the status by contacting the IRS Helpline or visiting the IRS website.
Yes. As with any tax matter, the IRS has the authority to review and verify that businesses are eligible for the credit and have accurately calculated the amount of the credit they claimed. The penalties for incorrect or fraudulently claimed credits may be substantial, so make sure you work with CPA ERC experts like Benny C. Phillips!