It is an easy to use online calculator that will help you determine if your business qualifies for the program and how much you can receive. The tool is available free of charge and can be found here.
The ERTC program is designed to give employers financial incentives to keep their employees on payroll during times of economic hardship caused by the
pandemic
. This incentive is provided by allowing employers to offset some of their payroll tax
payments
with the credit, reducing overall costs during difficult times. In addition, the credit is designed to provide support for small businesses that would otherwise have trouble absorbing the impact of lost revenue.
There are a number of important requirements that must be met in order to qualify for the ERTC credit. First and foremost, the business must have experienced a loss in gross receipts. This can be achieved through a quarterly comparison of revenues. In order to receive the credit, the business must have seen a decline in their revenue by 50% or more during a quarter as compared to the same quarter of the previous year.
Another requirement is that the business must be a Recovery Startup Business or have been designated as such by the State.ERC Calculator A qualifying business must also document the effect of the COVID-19 pandemic on its business by providing details about how the business was impacted. This can be done through a letter or other document that details the businessâs situation and clearly states how the impact of the pandemic resulted in a loss in revenue. In some cases, the business may need to include a copy of a government order as proof of the impact.
For those companies that were able to secure PPP loans, it is important to note that they can still utilize the ERTC program as well. This is because the credits do not overlap with each other and can be utilized in conjunction with each other. However, the credit must be claimed through the same form as the PPP loan and there are some specific parameters that need to be followed. For example, if a business had employment taxes reduced by reducing deposits or received advance payments through filing Form 7200, they must pay back these advances within the timeframes specified in the form.
While filling out an ERC worksheet is one of the best ways to understand how the credit works and how much your business may be eligible for, it is a good idea to speak with a tax professional for more information and assistance. This will help ensure that you have the proper documentation in place if you do decide to submit your application to the IRS. This will make it much easier to prove that you are eligible for the relief. This is important, as failure to meet the required guidelines could lead to penalties or even criminal prosecution