What’s ERC and how does your business qualify?
“What exactly is the ERC?” I’ve heard that from many company executives across categories.
It’s understandable, agencies and consultancies have been advertising for ERC filing services for months and some of their claims seem too good to be true. Fortunately, the Employee Retention Credit is a legitimate program that was enacted by the IRS to help businesses that retained their employees through the pandemic.
There are many ways a business may qualify:
- Did you need to change your ordinary business model to accommodate customer spacing and sanitation requirements?
- Were you and your team unable to attend trade shows or conduct face to face sales meetings?
- Did you suspend in-store demos or have to cap the amount of customers you allowed inside of your business?
Qualifying for ERC is extremely nuanced. Despite what many believe, It’s not just for those who lost revenue. Here are a few more factors that could qualify your company:
- Switching to remote work.
- Mandated shutdowns and limited hours.
- Supply chain issues, and many more subtle business operation details.
If you answered yes to any of the above, your business may qualify for the ERC. Yes, even if your business was deemed “essential”. In order to substantiate your application with the IRS, Park Settlement thoroughly reviews and documents your business operations to validate and ensure that your business can qualify for the ERC credit while remaining 100% compliant.
There are lots of people offering ERC services, so how do you know who to work with?
You definitely don’t want to work with a team that is haphazardly checking boxes. The most important question is whether they understand your business’ landscape. Choosing to work with the wrong consultants for ERC can mean missing out on substantial amounts of funds. We’re looking at $12k-$15k in credits on average, per employee. That’s a big chunk of change. Especially in complex industries, details easily slip through the cracks leading to significantly lower credits and/or future compliance issues.
How does Park Settlement determine your ERC eligibility?
To assess your potential credit, we look at your 2020 and 2021 W2 payroll taxes for eligibility. If you’re in a state that imposed strict COVID-19 restrictions, it’s possible that your business qualifies for a higher refund. With the extremely complicated paperwork involved in this process, it’s no surprise that many businesses are advised by their financial advisors and legal teams that they do not qualify. Despite this, at the end of the day, it’s worth looking into the ERC.
With a bit of finesse and thorough analysis by industry experts, you could receive a hefty check in the mail, courtesy of the IRS. There’s no financial risk to filing, Park Settlement only gets paid when you do. Contact us anytime, we’re happy to answer any questions you have concerning your company and ERC, even if you’ve been previously told your business does not qualify.
