What is the ERC?

Employee Retention Credit

The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) provides $2 trillion in measures to offset the impact of COVID-19, with direct support to individuals and businesses. The Employee Retention Credit (ERC) is a part of the CARES Act. It is a fully refundable tax credit that incentivizes employers to retain their staff during the Coronavirus pandemic by providing specific tax relief.

Am I Eligible?

IF SO, HOW MUCH CREDIT CAN I RECEIVE?

Offset your payroll tax and get cash back for credits above and beyond your payroll tax liability. The Employee Retention Credit is fully refundable, meaning if you qualify for $100,000 in credit and only owe $25,000 in payroll taxes, you get a $75,000 cash refund! The tax credit for 2020 is equal to 50% of wages and compensation.

With a limit on wages per employee of $10,000 with a maximum credit of $5,000 per employee for the entire year.

Due to recent changes put in place by Congress, the tax credit is equal to 70% of wages and compensation up to $10,000, with a maximum credit of $7,000 per employee, per quarter for 2021. The credit is available through 6/30/2021.2020

2020 RULES

Employers are eligible if their business operations have been fully or partially suspended as a result of a government order

or 50% reduction in quarterly receipts
compared to the same quarter in 2019

For employers with less than 100 full-time employees, the tax credit is for wages paid to all employees.

For employers with more than 100 full-time employees, the tax credit is for wages paid to employees who are being paid and not working.

2021 RULES

Employers are eligible if their business
operations have been fully or partially suspended as a result of a government order

or 20% reduction in quarterly receipts compared to the same quarter in 2019

For employers with less than 500 full-time employees, the tax credit is for wages paid to all employees.

For employers with more than 500 full-time employees, the tax credit is for wages paid to employees who are being paid and not working.

There is no limit on the number of employees or the size of your company that prevents you from taking your credit.

CASE STUDY

FAMILY RESTAURANT

Client owns a restaurant with (70) full time employees

They received a $496,500 PPP loan

ERC Results using EF Cost Recovery:
$350,000 ERC refund
Potential for an additional
$1,500,000 in 2021!

What restaurants are eligible:

Those whose operations are fully or partially suspended due to the coronavirus. Note: Virtually 100% of restaurants meet these criteria.

Those whose gross receipts have been
impacted >50% in 2020 or >20% in 2021.

How much can a restaurant get:

Earn up to:
$5,000/employee for 2020
$14,000/employee in 2021

The Challenge:

  • Forms and rules are dynamic
  • Payroll providers cannot qualify employees and are unsure of process
  • Wages CAN NOT conflict with PPPforgiveness
  • Subject to IRS audit, which could addcosts to defend

Our Solution:

We take care of everything:

  • Determine client eligibility
  • Correspond w/gov’t agencies and client payroll provider
  • Coordinate PPP forgiveness with you/CPA
  • Provide no-cost audit defense

Let Us Help. Free Consultation to See if You Qualify.

EF Cost Recovery has qualified and quantified credits for firms ranging from small startup firms to large corporations.
Contact us at 508-989-2793 or amathes@efcostrecovery.com