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Frequently Asked Questions

What is the Employee Retention Credit (ERC)?

ERC is a refundable payroll tax credit. Born out of the same CARES Act as PPP, its aim is to provide economic relief for small and medium businesses who retained employees during the COVID-19 pandemic. Initially, eligible employers could only take either PPP, or ERC. In 2021, as part of the Consolidated Appropriations Act, Congress amended this provision, allowing businesses to apply for both.

What would qualify my business for ERC funds?

Your business would qualify for ERC funds if you had non-owner, non-family payroll during the time period after March 12, 2020 and before October 1, 2021 and experienced one of the following scenarios:

  • A decline of revenue as compared to the same quarter in 2019. The qualifying reduction in gross receipts for 2020 vs. 2019 is 50% and the qualifying reduction for 2021 vs. 2019 is 20%.
  • Your business had a direct or indirect impact to its operations due to a government shutdown or other governmental order (i.e. social distancing mandate). More information on this in the next FAQ below!

Alternatively, all businesses who have non-owner, non-family payroll during Q3 and Q4 of 2021 qualify if the business is defined as a ‘Recovery Startup Business’. A Recovery Startup Business is simply a business that began on or after February 15, 2020 and has less than $1 million in annual revenue.

Here are some examples of having a direct or indirect impact to your business operations as a result of a government shutdown or other governmental order

Direct Suspension

Eligible scenarios:

A retailer must close several physical locations due to government orders; however, online sales continue and increase compared to prior periods. The closed storefront operations represent a more-than-nominal portion of the business’s operations.

A physical therapy facility was not deemed an essential business and was ordered to close due to a government order. The facility moved to an online format and was able to serve some clients remotely, but not all. Access to equipment and the facility were no longer possible, and these are considered central to operations.

Non-eligible scenarios:

A grocery store is deemed an essential business. However, a government order requires grocery stores to discontinue their self-service offerings (e.g., salad bar). It modifies its business operations in compliance with the order. However, the salad bar is not a more-than-nominal portion of the business and discontinuing the self-serve services did not have a more-than-nominal effect.

A SaaS company is not deemed an essential business and was ordered to close due to a governmental order. Prior to this, employees teleworked approximately twice a week. Due to the order, all employees begin teleworking on all days. In effect, the company was able to continue its business in a comparable manner. ​

Indirect Suspension

Here are some common examples of businesses being indirectly affected by a partial suspension.

Eligible scenarios:

A raw materials supplier is required to shut down due to government orders. As a result of suppliers’ shutdown, and the inability to source an alternative supplier, a manufacturer is not able to perform its operations.

A company that provides anesthesia services for elective procedures to hospitals is disrupted because the hospitals for which they normally provide anesthesia services have been ordered to discontinue elective procedures.

A manufacturer experienced a breakdown of equipment for a product line that accounts, for example, for 25% of the business’s operations. The equipment servicer is based outside the US and unable to travel due to a US border closure. The equipment is highly specialized, and it was not possible to source alternative servicers.

Non-eligible scenarios:

A vendor that is the sole supplier of a critical raw material is shut down due to government orders. However, the manufacturer increases supplies of an equivalent or similar material from another vendor in order to keep operations going. Though its original supplier is subject to a government order, the manufacturer was able to continue operations in a comparable manner.

* More-than-nominal portion of business operations is generally considered a portion of the business that represents at least 10% of the business’s 2019 gross receipts or employees’ hours of service.

** More-than-nominal effect on business operations is generally considered an impact of at least 10% on a business’s ability to provide goods or services.

How is ERC different from the Paycheck Protection Program (PPP)?

PPP was a forgivable loan. ERC is a refund that can exceed the amount of tax liability your business had in a given year and is thus even more powerful than a traditional tax credit. Once you receive the ERC funds from the US Treasury, no further action is required on your part.

Why haven't I heard about ERC before?

PPP was heavily marketed by the SBA, while ERC is claimed directly through the US Treasury. Along with our bank partners, it’s our mission to educate you and obtain for your business the payroll tax refund that it’s entitled to.

Why can't my CPA do this for me?

There are over 70,000 pages of tax code; it’s impossible to be an expert on all of them. ERC is all we do. It’s like the difference between your family doctor and a neurologist. By concentrating on this one program, we understand the intricacies and nuances involved in determining your eligibility and accurately calculating your refunds.

How do I know if my business qualifies?

The IRS expects 70% - 80% of small and medium businesses to qualify. If your business experienced disruptions to commerce, travel, or group meetings, you qualify! This includes supply chain disruptions, price increases, staffing shortages, difficulty hiring, reduced hours, reduction in goods or services offered, were unable to travel, or attend conventions. Talk to one of our Refund Specialists to find out more.

What if we wait to claim ERC?

Time is of the essence as the program has technically expired. However, we have a limited window of time that the IRS refers to as the ‘period of limitations’ to apply for the money which is rightfully owed to you by this legislation. Work with us to amend your prior period tax returns in 2020 and/or 2021 to apply for your ERC funds. Don’t delay!

Do I have to pay this back?

It’s a tax credit that can exceed the amount of your tax liability. These are funds owed directly back to your business if you qualify. There are no limitations on how you use it for your business!

My business was profitable or deemed essential, can I still qualify?

Absolutely! Both Essential and Non-essential businesses alike can qualify, and a decline in revenue is not required. Many of our clients even had increases in sales, but still experienced disruptions or were negatively impacted.

What is your fee and when do we pay it?

Our pricing is based on number of W2 employees. We do not charge any upfront fees. We invoice after you collect your tax credits.

How long will it take to get my refund?

Based on our research and experience to-date, you’ll likely receive refund checks from the US Treasury in 4 - 6 months, depending upon their backlog. The longer you wait, the longer it will take!

How is the refund calculated?

Determining the proper amount that you’re entitled to is a complex accounting process. Although these are tax credits, what you’ve paid or owe in tax for the corresponding tax year has no bearing on your ERC calculations. The refunds are based on many factors including qualifying quarters, number of employees, hours worked, wages paid and if applicable, PPP loans, group health premiums and participation in other government programs to name a few.

But I've been told my business does not qualify.

Many times for companies who were previously told they didn’t qualify do in fact qualify. Some reasons might be that the individual or organization stating this was only looking at the gross receipts qualification and not the nominal impact to business operations by a government shutdown or governmental order, the individual had outdated information on the overlap between PPP and ERC, and many other nuanced reasons. This is why talking to an organization that specializes in ERC could be a great help to your business. It won’t cost you a penny to see how much we can recover for you, so please don’t hesitate to reach out or fill out our form by hitting one of the Apply buttons on our homepage.

What should I expect after the application is submitted to the IRS?

Due to the Employee Retention Credit, the IRS is currently working through a backlog of amended Form 941 fillings. This means you could experience an extended wait time before you receive your refunds. Average wait times are 4 - 6 months for pending applications and 3+ months for new applications.

How do I check the status of my ERC refund?

To check the status of your refund, you can call the IRS directly at (877) 777-4778. You can also always reach out to us for any updates throughout your refund process.

Can I earn more cash while awaiting my refund?
Refer your friends to us and you can earn even more money for every successfully qualified application.