It is a critical task to navigate through government laws and regulations. If you make a small mistake while filling out a form, you might have to deal with Uncle Sam. This makes businesses and individuals look for those rare chances where the government offers avenues of assistance when such problems arise. 

If you want to get help filing for ERC, here are a few questions that you may like to keep in mind. 

Employee Retention Tax Credit – What is it?

The CARES Act or the Coronavirus Aid, Relief, and Economic Security Act introduces the ERTC to assist businesses in maintaining their payroll and retaining employees. Eligible employers and medium-sized businesses were given the means to get up to 50% of the wages they paid from 13th March to 31st December 2020. Employers who already get PPP or Paycheck Protection Program can still qualify for ERTC.

How does ERC work?

As we see, Employee Retention Credit is a form of redeemable tax credit that is available for the businesses and employers who qualify. The percentage of qualified wages that the business owners receive is based on a few factors like qualified wages and employee cap. 

Who can qualify for ERC?

In order to qualify for ERC, you have to prove that your business has been unable to bear the brunt of the pandemic. Your business may have gone through either a partial or a total shutdown during the pandemic or there has been a drastic reduction in receipts. 

Will I be allowed to claim both PPP and ERC?

Yes, you can. If you initially took out a PPP loan, you wouldn’t claim for ERTC. But after the rectification was done in 2020 by the Consolidated Appropriations Act, small businesses could grab both the opportunities of ERC and PPP only if they met the eligibility criteria. 

How am I allowed to spend the proceeds of the  ERC?

The ERC is more like a refund and this means you won’t be permitted to spend the money as you like. Since it’s deemed as a 100% refundable tax credit, you’ll get up to 50% of the $10,000 in wages for each employee who was negatively impacted by the coronavirus shutdown. 

So, if you are a business owner who has been adversely affected by the pandemic, you can claim an ERC with the help of an attorney.