What is ERC support and how can it help your business get the refund it deserves?
ERC support is an efficient and reliable way to help your business streamline the processes associated with getting a refund from the government. It helps you maximize the amount of refunds you receive, as well as ensure that the process is conducted quickly and accurately.
ERC support services are provided by the experienced professional CPAs at Northstar. We specialize in understanding and negotiating the intricacies of tax credits, grants, and other government programs.
Keep reading to learn more about the key benefits of ERC support and why it’s important for your business.
What is ERC and How Does It Work?
The ERC, or the Employee Retention Credit, is a tax credit available to eligible employers to help retain their employees during the COVID-19 pandemic. The credit was created as part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act, and it provides eligible employers with a refundable tax credit equal to 50% of qualified wages paid to employees.
Eligible employers have the option to claim the credit on Form 941, which is due quarterly. In order to maximize your ERC claim and receive a full refund of up to five thousand dollars ($5,000) per employee, you must apply for the credit through the Internal Revenue Service’s (IRS) ERC portal.
Loving this post? Make sure to check out our other article about how long it takes to get an ERC refund before you leave!
How do you receive ERC money?
Eligible employers can receive ERC money by claiming the credit on their quarterly employment tax returns. If the credit exceeds the amount of employment taxes owed, the excess can be refunded to the employer.
ERC money can also be obtained by filing a Form 7200, Advance Payment of Employer Credits Due to COVID-19. This form can be used to request an advance payment of the credits and will be refunded to the employer when they file their next employment tax return.
How much ERC will I get?
The amount of ERC that an employer will receive is based on the amount of qualified wages paid to employees. The credit is equal to 50% of the first $10,000 of qualified wages paid to each employee, for a maximum credit of $5,000 per employee.
How do you apply for ERC?
Eligible employers can apply for ERC by claiming the credit on their quarterly employment tax returns. Employers should review the ERC requirements and qualifications to ensure that they are eligible for the credit.
Who is eligible for ERC funding?
To be eligible for ERC funding, employers must have been fully or partially suspended from business operations due to COVID-19 government orders, or have experienced a significant decline in gross receipts compared to the same quarter in the prior year. As an employer, you also must have either been in operation for all quarters of 2019 or be a new employer established in 2020.
What does ERC grant stand for?
ERC does not stand for a grant; it stands for Employee Retention Credit. The ERC is not a grant, but rather a tax credit that can be claimed by eligible employers on their quarterly employment tax returns.
What are the aims of ERC?
The aim of ERC is to help eligible employers retain their employees during the COVID-19 pandemic. The credit is designed to provide financial support to employers who have been impacted by COVID-19 and to help prevent layoffs and keep employees connected to their jobs.
Closing on ERC Support
ERC support is a valuable resource for eligible employers during the COVID-19 pandemic. By claiming the credit on their quarterly employment tax returns, eligible employers can receive financial support to help retain their employees and keep their businesses operational.
Employers should review the ERC requirements and qualifications to ensure that they are eligible for the credit, and should seek assistance from a tax professional if needed. Feel free to reach out to the Northstar team to speak with one of our expert CPAs now.