The ERC rules are very complex and disparate. Several changes in the law over 18 months caused the IRS to issue a series of revisions. Identifying the latest rules, embedded throughout the IRS tax code, can be daunting. Your CPA and tax preparer may not have the knowledge and experience you need.

Having filed many claims, our team of tax experts know the ERC code tip-to-toe and that’s important because when we file a claim on your behalf you want to be sure mistakes and oversights don’t derail your filing, putting you at the back of the line. What’s more, knowing the various details of the program will ensure we maximize your credit amount. 

Yes. The Taxpayer Certainty and Disaster Tax Relief Act of 2020, enacted December 27, 2020, modified the ERC credit rules, allowing companies with PPP loans to also qualify for ERC.

The amount of wages you can use to qualify for ERC will be a function of wages used for PPP. We will make this assessment for you in our Eligibility Analysis. 

Surely you should do this because it becomes free money. Now, how you allocate the expenses for forgiveness will have an impact on the amount of ERC you can get. 

When applying for forgiveness, the IRS (and SBA) allow you to allocate as much as 40% of the amount forgiven to non-wage expenses such as rent or lease payments, mortgage interest, utility bills, and a few other “covered” expenses. 

These figures are detailed on form 3508 (PPP loan forgiveness) and it's important to maximize this 40% allocation because it reduces the amount of wages used for forgiveness, freeing up more wages for ERC.

IRS states that both PPP loan forgiveness and ERC can tap wages within overlapping qualifying periods, however, the same wages cannot be used for both. In other words, there is no double dipping.

There are 3 optional ways to qualify for ERC. If your revenue increased YoY (2020 v. 2019) option 1 may not be applicable, but you may still qualify under options 2 and 3.

1) Revenue reduction; or

2) Supply chain disruptions; or

3) Forced shutdown, curtailment, or suspension of operations by government authority.

Our quick Qualifier Survey walks you through these options, providing an accurate estimate of your credit.  Access the survey here. 

Possibly. To date, $400B has been earmarked by Congress allocated on a first-come, first-serve basis. Additional funding will require another act of Congress.

The amount of credit is a function of gross wages (including employer paid healthcare). While ERC is classified as a tax credit, the amount is derived by each employee’s wages earned in the particular qualifying quarter in question. 

ERC funds not applied towards owed payroll taxes are treated as an 'over deposit' of taxes and will be requested as a refund check from the IRS.

No, business owners owning greater than 50% of the company are not eligible for ERC on their personal wages; however, company staff wages are eligible. IRS Constructive Ownership and Aggregated business rules apply.

1) Complete the online Qualifier Survey to determine your preliminary eligibility;

2) Upload 941s and other requested documents so we can determine your eligibility and the corresponding potential claim amount. We will prepare your Eligibility Analysis Report;

3) Undergo our due diligence;

4 Engage us to process and submit your claim.IRS processing times can be upwards of 12 months. 

We file forms on your behalf that allow us to track the progress of your claim.

ERC rules use 2019 employee headcount as the baseline to determine whether the business qualifies as a small, mid-size or larger employer. This is important because ERC qualifying and available tax credits are different for entities classified by this criteria. Click here for details.

Additionally, Aggregated Employer rules apply and could impact ERC qualifications by total employee headcount or “controlled groups” whereby all combined companies are treated as “one” when it comes to qualifying and the amount of tax credit.

Per Internal Revenue Code, the ERC credit you receive is not regarded as taxable income; however, the credits received generally disallow deductions for wages and salaries paid or incurred during the same period. The tax reconciliation may require the filing of amended income tax returns. We recommend you consult with your trusted tax advisor on this matter.