ERC Facts and Figures
Employee Retention Credit
(Please read entirely before signing our agreement and forwarding ANY documentation to us).
WHAT IS THE ERC AND AM I ELIGIBLE
(ERC) Employee Retention Credit is a refund that the Internal Revenue Service is offering to businesses that continued to pay their employees during the pandemic. All W-2 wages that you paid to employees during 2020 and 2021 may be considered for eligibility.
NO COST CHARGE OR OBLIGATION TO SEE WHAT YOU ARE ELIGIBLE FOR!!!!!
2020
Wages paid in Quarter 2, Quarter 3, and Quarter 4 may be eligible, also all wages paid between March 13th and March 31st, 2020, may also be considered.
2021
Wages paid in Quarter 1, Quarter 2, and Quarter 3 may be eligible NOT Quarter 4.
WHAT CAN I QUALIFY FOR?
Every employee can potentially qualify for up to $5,000 for year 2020, and possibly $21,000 for year 2021. So, the business owner may qualify for up to $26,000 for each of your employees! This is paid by the IRS in the form of a refund check and is NOT TAXABLE INCOME! (See IRS FAQ 86. on last page)
WHAT DO I NEED TO DO?
Submit the following documentation.
(All required documents are listed on our Required Document Checklist)
REQUIRED DOCUMENTS
All 941 Payroll Tax Returns filed and paid for the following Quarters:
1st qtr. 2020 2nd qtr. 2020 3rd qtr. 2020 4th qtr. 2020
1st qtr. 2021 2nd qtr. 2021 3rd qtr. 2021
In addition to the 941 returns you need to supply the payroll summary detail report showing each employee’s name and gross wages. This is needed for each of the quarters listed above.
If you have a payroll company, they can provide you with that information.
We also need verification of any and all PPP money that you received, whether you applied for forgiveness, and if so, how much forgiveness you actually received. If you have the Forgiveness Application, please submit that to us as that works best. This is required for us to follow IRS calculation guidelines.
In addition to the information listed above you need to explain if and how Covid-19 negatively affected your business, examples are: Fed, State, County, and City order mandates such as quarantine, social distancing, business inability to access equipment, limited capacity suspensions to do supply chain issues, etc. Whether you suffered any significant decrease in Gross Revenue. This needs to be typed, signed, and dated by you. Preferably on your business letterhead.
HOW DO WE GET PAID?
All our work is done with NO upfront cost, charge, or obligation. Our services are limited to analyzing the information that you provide us. Calculating the amount of the ERC that you may be eligible for as per the IRS calculation guidelines. And finally preparing the amended 941-X
Returns for any quarters that you may be eligible to receive a refund for. The completed 941-X IRS Forms will be returned to you for signing and it is your responsibility to overnight mail them to the IRS. (We will provide you with the IRS address).
Determining your eligibility is solely and completely at the discretion of the IRS. We have NO control over what they determine. You may or may not be deemed eligible for a refund after they review your amended 941-X Returns, and your refund may be different than what our calculations show after they complete their review.
THE IRS MAKES THE FINAL DECISION.
If and only if the IRS determines you are eligible for a refund for any of the quarters in question, you will receive a notice from them stating the amount of the refund and ultimately a check for each quarter individually.
Copies of all the statements you receive from the IRS must be emailed to us so we can compare the actual amount you received to our original determined amount as the amounts may vary.
If we are successful, the fee for our services is only 10% of the refund amount we secure for you. That amount is due and payable to us 24 hours after you receive the refund. You will be provided with a separate Fee Agreement that needs to be dated, signed, and returned to us before any work can begin.
Our fee is calculated off the amount of the refund we secure for you NOT necessarily on what you receive in actual check payments.
Example:
If you are found eligible for $100,000 but the IRS finds that you owe back Payroll Taxes that we were unaware of for say $20,000? The IRS is going to pay those back taxes first and refund you the difference of $80,000 in this example. Understand we are still going to receive our fee of 10% on the entire $100,000.
IF YOU ARE FOUND TO BE INELIGIBLE AND RECEIVE NO REFUND CREDIT, WE DON’T GET PAID!!
No work on any file starts until ALL the required documentation and the signed Fee Agreement is received.
HOW LONG WILL THIS TAKE?
On average our work should be complete within 3 weeks from the day we receive ALL the required documents AND the signed fee agreement. Once we return the completed package to you and you overnight mail it to the IRS, there is NO way to determine how long it will take for you to receive any correspondence back from the IRS.
We are advising our clients to expect it to take potentially 3 months but could be longer.
IMPORTANT FACTS TO CONSIDER FROM THE IRS
IR-2022-183, October 19, 2022
If the business filed an income tax return deducting qualified wages before it filed an employment tax return claiming the credit, the business should file an amended income tax return to correct any overstated wage deduction.
Special Issues for Employers: Income and Deduction
86. Does an Eligible Employer receiving an Employee Retention Credit for qualified wages need to include any portion of the credit in income?
No. An employer receiving a tax credit for qualified wages, including allocable qualified health plan expenses, does not include the credit in gross income for federal income tax purposes. Neither the portion of the credit that reduces the employer’s applicable employment taxes, nor the refundable portion of the credit, is included in the employer’s gross income.