ERC Program Benefits: How to Maximize Tax Credits for Employee Retention

In recent years, business owners have faced unprecedented challenges, and many have struggled to stay afloat amidst the ongoing pandemic. Fortunately, there are resources available to help alleviate some of the financial burdens faced by businesses. One of the most valuable resources for businesses is the Employee Retention Credit (ERC) program, which provides payroll tax refunds to employers who have retained their W2 employees during Covid.

A significant benefit of the ERC program is that it is not another loan program. Instead,  it is a grant that rewards employers for retaining their W2 employees during the pandemic. This is especially important, as many businesses have had to make difficult decisions regarding layoffs and furloughs. By participating in the ERC program, businesses can receive payroll tax refunds of up to $26,000 per W2 full-time employee for a majority of 2020 and 2021.

To maximize the benefits of the ERC program, it is crucial to work with experienced professionals who can guide you through the process. At REIL Capital, we have extensive experience in navigating the complexities of the program and can help ensure that you receive the maximum refund possible. 

ERC Program Benefits

The Employee Retention Credit (ERC) program is a valuable resource for businesses looking to alleviate some of the financial burdens caused by the pandemic. One of the most significant benefits of the ERC program is the maximum payroll tax credit that eligible businesses can receive. Understanding this maximum credit is crucial for businesses looking to maximize the benefits of the ERC program.

• For tax year 2020, eligible businesses can receive a maximum payroll tax credit of $5,000 per employee for the year. This credit is equal to 50% of the first $10,000 of eligible wages paid to each employee during the tax year. This credit can provide a significant financial boost for businesses struggling to retain employees during the pandemic.
• In Q1, Q2, and Q3 of 2021, eligible businesses can receive a maximum payroll tax credit of $7,000 per employee per quarter. This translates into a maximum credit of $21,000 per employee for 2021. The credit is equal to 70% of the first $10,000 of eligible wages paid per quarter, per employee, assuming the business qualifies for the first three quarters of 2021. For example, if a small business with 50 employees is eligible for the first three quarters of 2021, it could potentially receive a $1,050,000 IRS payroll tax credit (50 employees x $21,000).

It is important to note that businesses must meet specific eligibility requirements to qualify for the ERC program. Working with experienced professionals can help ensure that your business meets these requirements and receives the maximum credit possible.

ERC Program Eligibility

The Employee Retention Credit (ERC) program was created to provide financial relief to eligible businesses impacted by the COVID-19 pandemic. To qualify for the ERC, a business must experience either a government-mandated full or partial suspension of operations or a significant decline in gross receipts.

• For Q2, Q3, and Q4 of 2020, a significant decline in gross receipts is considered to have occurred if an employer’s gross receipts for a given quarter are less than 50 percent of their gross receipts for the same calendar quarter in 2019.
• For Q1, Q2, and Q3 of 2021, a significant decline in gross receipts is considered to have occurred if an employer’s gross receipts for a given quarter are less than 70 percent of their gross receipts for the same calendar quarter in 2019. However, an optional election is available for the first three quarters of 2021. If a taxpayer doesn’t experience a 20-percent decline in gross receipts in a particular quarter, they can elect to compare the gross receipts of the immediately preceding calendar quarter.

For instance, if in Q1 2021, a taxpayer doesn’t experience a 20-percent decline in gross receipts, they can elect to compare Q4 2020 gross receipts to Q4 2019 gross receipts to determine eligibility for Q1 2021.

It’s important to note that eligibility for the ERC program also depends on the size of the business. For tax year 2020, businesses with up to 100 employees can claim the credit for all employees, while for Q1, Q2, and Q3 of 2021, businesses with up to 500 employees can claim the credit for all employees.

Why choose the ERC Program for your business?

If you are a business with less than 500 full-time employees affected by Covid restrictions, you may be eligible for the CARES Act Employee Retention Credit (ERC). This credit can provide much-needed financial relief to businesses impacted by the pandemic, but understanding and maximizing the credit can be a complex and time-consuming process.

Here are some reasons why you should consider working with us:

• We average 10-20 percent more funding than a CPA unfamiliar with the highly complex tax code and qualifications. This means you can get more money for your business.
• We can evaluate your claim to ensure maximum credit. We have in-depth knowledge of the CARES Act Employee Retention Credit and can help you navigate the complex requirements.
• We provide faster results and faster funding. Our team works efficiently to get you the results you need, so you can get the funding you need to keep your business going.
• You don’t pay any fee until you have received refund checks. We work on a contingency fee basis, which means you only pay us if we successfully obtain funding for your business.
• We specialize in ERC, allowing us to find more funding for your business. Our team is dedicated solely to ERC, which means we have a deep understanding of the program and can help you get the most out of it.
• We offer a quick and easy process along with professional support. Our process is streamlined and efficient, and our team is always available to answer any questions you may have.

The Process

We are a specialized payroll tax refunds service company dedicated to helping small businesses maximize their CARES Act Employee Retention Credit (ERC) refunds. Our team of experts focuses exclusively on ERC, allowing us to provide a quick, hassle-free process that delivers results.

Our process starts with a qualification assessment to determine if your business is eligible for the ERC. Once qualified, we analyze your payroll documentation and PPP information to maximize your credit with the IRS. Our experts scrutinize your records to identify every eligible credit opportunity. We then provide you with an ERC refund analysis that gives you a clear picture of the amount of refunds you can expect to receive. If you agree with the analysis, we’ll proceed with an agreement signing that outlines our fees and the terms of our services.

We submit the necessary forms to the IRS on your behalf and keep you informed of any updates or developments during the refund process, which typically takes 4-5 months to complete. Once processed, your refund checks will be mailed directly to you from the IRS. We don’t charge any fees until you receive your refund checks, and our services are designed to get you 10-20 percent more funding than a CPA unfamiliar with the highly complex tax code and qualifications.