Companies can no longer pay their salaries to apply for the employee retention tax credit, but they have until 2024 and, in some cases, 2025, to analyze their payroll during the pandemic and apply for the credit retroactively by filing an amended tax return. This means that businesses can still take advantage of this opportunity to receive financial aid from the government, even if they have already paid their employees. The CARES Act does not require employers to pay qualified wages in order to be eligible for the employee retention credit. The credit is allowed against employer participation in social security taxes under section 3111 (a) of the Internal Revenue Code (the “Code”) and the portion of taxes imposed on railroad employers under section 3221 (a) of the Railroad Retirement Tax Act (RRTA) that corresponds to social security taxes under section 3111 (a) of the Code.
The amount of qualified wages for which an eligible employer can apply for the employee retention credit does not include the amount of qualified wages for family leave and sick leave for which the employer receives tax credits under the FFCRA. An eligible employer cannot receive the employee retention credit if it receives a PPP loan authorized under the CARES Act. Government rules and regulations are notoriously difficult to understand, making people and businesses doubt those rare opportunities and avenues of support funded by the government when they present themselves. According to the National Federation of Independent Business (NFIB), only 4% of small business owners are familiar with the ERTC program and many are wondering what it is.
The ERTC serves as a lifesaver to help companies and eligible employers and their employees survive the waves of unexpected events that have occurred in recent years. Since employee retention is such a hot topic, the government understands that, to keep employees close, you'll still have to be able to pay them. So how can this government aid be capitalized on? Are there any pitfalls? What are the requirements? ERC Assistant is an employee retention credit service that offers a simplified process for onboarding customers and filing claims in as little as one to two weeks. ERC Assistant also has a secure customer portal that protects sensitive information to protect you from fraud by ERC or other malicious people.
You can get an initial estimate of the ERC at no cost, with a minimum investment of time in the interface. Finally, the ERC Assistant team can deliver ready-to-file documents to the IRS without involving your payroll company. ERC Today is an employee retention credit service that helps companies assess their eligibility, complete a thorough analysis of their applications, provides guidance on the application process and documentation, provides specific knowledge about programs that a regular CPA or payroll processor might not know well, and executes a quick and simple process from start to finish, from eligibility to applying and receiving reimbursements. The experts at ERC Today are nationally recognized as opinion leaders in terms of policies to help COVID-19 affected businesses. In addition to the employee retention credit services offered by ERC Today, Aprio works with other credits to increase its customers' liquidity. The team has ERC advisors dedicated to educating the public and guiding customers to maximum COVID relief benefits.
Basically, all companies qualify for the ERC, unlike PPP loans, since there is no need to demonstrate a decrease in revenues, but if there is a decrease, the grant is automatic. If you have any questions about how to calculate your employee retention credit, consult a qualified tax professional. To apply for the ERC tax credit, companies must first apply to the IRS. Companies must provide basic information about their company and its employees, as well as documentation that shows that they have been affected by the pandemic. Start here to start filing your ERC credit.
The IRS will then review the application and determine if the business is eligible for the credit. If approved, the credit will be applied to future payroll taxes. For companies that are struggling to retain their employees, the ERC can provide much-needed financial aid. Technically, yes, but you only pay salaries that meet the requirements while terms of office are in effect and have a more than nominal impact on your company. While an employer cannot include salaries financed by a PPP loan in their ERC calculation, PPP funds only apply to eight to ten weeks of wage expenses. ERC eligibility periods are longer than PPP loans can finance non-wage expenses.
The ERTC program offers businesses an opportunity to receive financial aid from Uncle Sam even if they have already paid their employees.