There are two main ways to be eligible for stimulus refunds:

1) Employers are eligible for ERC if they match the required decline in revenue within any quarter of 2020 or 2021.

2) Employers are eligible if they experienced a more than nominal impact to their operations due to a full or partial government-mandated shutdown.

Depending on how much qualified wages were paid to employees, up to $5,000 can be credited per employee from March 13, 2020, to Dec. 31, 2020 as well as up to $21,000 per employee between the period of Jan. 1, 2021, to September 30th  30, 2021. Depending on how large your company is, you could earn up to six or seven figures back in funding. Eligibility can be determined by electing to use the immediately preceding calendar quarter.

Many industries faced decline during the pandemic. If your company’s gross receipts were 50% lower in a certain quarter than they were in the same quarter of 2019, pre-Covid-19, your business qualifies to file for ERC. Since there have been several changes within the last year regarding Employee retention Credit, many businesses are disqualifying themselves based on rumors, when in reality, they could very well qualify.

If your business has faced any of the below during 2020 or 2021, you may qualify:

- Full or partial shutdown

- Significant decline in sales

- Full or partial suspension in business

- Supply chain or distribution interruption

- Inability to access equipment

- Interrupted operations

- Reduction in operation hours

- Reduction in customer & client interaction

- Switching hours for sanitation reasons

- Faced decrease in providing services

If your business belongs to one of the following industries, you could qualify for credits:

- Education – colleges and universities

- Non-Profit or tax-exempt organizations

- Government

- Hospitality and Retail

- Industrial

- Real Estate and Construction

- Technology

Both essential and non-essential businesses are eligible for the payroll tax credit. All businesses were forced to adapt to safety restrictions and even face a partial shut down due to the pandemic. The Employee Retention Tax Credit (ERC) is the government’s way to give back to businesses and essentially reward them for keeping employees on payroll, even if these employees were forced not to work.

ERC is important because it can be responsible for increasing the chances of success for large organizations, small businesses and startups alike. If you are an eligible employer, filing for Employee Retention Credit can offset or eliminate payroll taxes and is currently one of the largest refunds businesses can get. Keep in mind that once filed, it can take up to nine months to receive your credit.

The statute of limitations for the ERC in 2020 and 2021 do not close until April 15, 2024 and April 15, 2025 respectfully. If your business is eligible for stimulus credit, you have until the deadlines to file. However, knowing the timeliness it can take to receive credits, it is wiser to file as soon as possible. You can file by reducing your payroll taxes sent to the Internal Revenue Service (IRS).

A common question around ERC is if it needs to be paid back. To answer, ERC does not have to be paid back as it is not a loan. However, you cannot take ERC into income when you receive it. You must instead reduce deductions for wages on your income tax return.

Did you know that 99% of businesses are small to medium sized companies? Smaller companies have different benefits of ERC than larger companies. Small employers can include wages paid by all employees while larger companies can only include those who were not performing work services.