The Employee Retention Credit (ERC) was put into place to help businesses with the cost of keeping staff employed during the Pandemic. Many businesses have taken advantage of this credit and received crucial funds to continue operating.
If you have not yet claimed the credit, there’s still time to take advantage of the ERC for the 2020 and 2021 tax years (even if you’ve filed your taxes for those years) and have your business refunded significant tax credits.
The Financial Relief Provided by the ERC can be Quite Significant
- In 2020, the credit value was up to $5,000 per employee.
- In 2021, it was up to $7,000 per employee each quarter (If you have 20 employees, that’s $140,000 per quarter. If you qualified for ERCs in all three quarters in 2021, that’s $420,000 for the year).
ERC Eligibilty Requiements
- An employer is eligible for this credit if they experienced a decline in gross receipts meeting the respective year’s threshold.
- An employer is also eligible if their trade or business operations were fully or partially suspended due to a government mandate or order, regardless of gross receipts. Even if your offices did not close, whether temporarily or permanently, government mandates and orders often lead to supply chain disruptions, vendor relationship challenges, reductions to hours of operation, and other business model and operational changes that could make your business eligible.
- Detailed information on eligibility is available on our blog here.
What Should My Business Do?
Due to the significant tax credits available, it is worth exploring if your business is eligible for the ERC. If you qualify, you may have to file amended returns and make calculations to determine your available credits. The Business Tax and Advisory Teams at LGA help can you navigate the complexities of claiming the ERC for your business. If you have any questions, please contact LGA Principal Jim DeCesar or call us at 781-569-4700.
