The pandemic and the strict guidelines of the government was a huge blow to our economy. To help individuals and organizations to cope with the blow, the American government took some initiatives and introduced some programs. Some of the programs are ERC. The ERC is a part of the CARES Act. Under this program, the government provides financial aid to companies to pay their employees. It helped the employers to pay their employees and also support health insurance. Click here to learn more about ERC.
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What are the benefits of ERC?
Under ERC, the maximum payroll tax is:
- In 2020: 50% of 10,000$ in eligible wages.
- In 2021: for Q1, Q2, and Q3, 7,000$ per quarter to each employee, which means a credit that sums up 21,000$ for that year.
What is the eligibility for ERC?
To get ERC, ensure your organization was fully or partially closed during the pandemic. Also, you will get it if you have made a loss that accounts for more than 50% of revenue compared to 2019 or 20% of 2020. And also, you will be eligible if you are a startup that came into action on 20th February.
How can a tax attorney help regarding ERC?
The tax attorney will help the employers fill out all the ERC paperwork. The ERC filing needs a lot of documents and filling up forms. Handling it alone is next to possible. Any mistake or delay can jeopardize your chances of getting ERC. The skill and experience of the lawyers will do all the work for you while you can concentrate on your business. Hiring a tax professional will save your time and money.
What are the misconceptions about ERC?
Business owners often think that they are not eligible for ERC. they think their income will not be less by 50% when compared to 2019. Businesses with PPP loans are also eligible for ERC. even if your business was closed during the pandemic, and you could also be eligible.
Conclusion
If you think you do not need ERC, then rethink. ERC will help you meet the losses you made in 2020 and 2021. If you are afraid that the process is lengthy, talk to a tax professional. It is an excellent step by the government to help the business owner get back on foot.
