ERC Easy, which is based in Sheridan, WY, is urging small businesses in the US to check if they qualify for the employee retention credits (ERC) program, which can provide businesses with a significant amount of funds that they can use to help recover faster from the negative effects of the COVID pandemic on companies. As indicated by the name of the tax credit, its purpose is to motivate businesses to keep and not to fire their employees when faced with the financial challenges caused by the restrictions on their operations resulting from the government’s response to the pandemic. More about the tax credits can be gleaned from the IRS website.
ERC Easy is introducing the services offered by BottomLine Concepts, which is primarily focused on helping businesses maximize what they can get from the ERC program of up to $26,000 per employee. They collect no fees unless the business qualifies and receives the grant.
The ERC program was created by the CARES Act, which is a refundable tax credit. It is a grant and not a financing service like the Paycheck Protection Program (PPP) that was also established by the CARES Act. As explained by the ERC Easy video, previously, during the Trump Administration, those who took advantage of the PPP cannot make a claim for the ERC program. However, with the new legislation in 2021 under the Biden Administration, it has become possible for businesses to benefit from the ERC program in spite of having used the PPP.
The amount of money that can be claimed is up to $5,000 per employee for the year 2020 and up to $7,000 per employee per quarter for the year 2021. In order for a business to qualify, the business must have been mandated by a government authority to partially or fully shutdown during 2020 or 2021. This includes the operations of the business being restricted by commerce, limitations on group meetings, and inability to travel. The gross receipt decrease criteria is different from 2020 and 2021, but it is measured and compared to the current quarter with the 2019 or pre-COVID gross receipts. Based on this, a business can qualify for a particular quarter and not for other quarters.
For 2020, the amount that can be claimed for each W-2 employee included in the business’ payroll for that period is $5,000. This is for the entire year of 2020. For 2021, the rule was modified with the amount increased to $7,000 for each quarter for the first three quarters. This means that for 2021, the total amount that can be claimed can be as high as 3 times $7,000 or $21,000. For start-up businesses that were established during the pandemic, they may also claim for the fourth quarter of 2021.
Most enterprises, including colleges and universities, clinics, and 501(c)(3) non-profit organizations, are eligible for the ERC after the American Rescue Plan (ARP) Act of 2021 was passed. One of two conditions will have to be complied with during the quarter in 2021 wherein the ERTC is to be claimed. The first condition is that a contract was either permanently or temporarily suspended or forced to reduce its hours of operation as a result of a federal mandate. The second condition is that the ERC tax credits apply only to the period of that specific quarter wherein the enterprise was shutdown, and not the whole month.
For restaurants, cafes, and other food businesses, the IRS has indicated the conditions to qualify for the ERC. First, social distancing requirements had resulted in a decrease in the capacity of the business, such as a restaurant or cafe. Second, the restaurant had to shutdown its indoor dining services even if it was permitted to provide outdoor dining or delivery. And third, the restaurant had to close indoor dining but was permitted to offer takeout or delivery.
Those who are interested in learning more about the ERC program and how to qualify can check out the ERC Easy website at https://www.erceasy.com or contact them on the phone or through email.
For more information about ERC Easy, contact the company here:
1309 Coffeen Avenue
Sheridan, Wyoming 82801