Employee Retention Credits – FAQ

employee retention credits - your questions answered

Employee Retention Credits, or ERCs, are an important topic for your business. Many business owners have little information about how ERCs work and how to claim them.

In this post we discuss employee retention credits and how you should approach them to ensure maximum benefit to you.

What are Employee Retention Credits (ERCs)?

  • Employee Retention Credits (ERCs) are payroll tax credits from the federal government.
  • The amount is often generous, up to $26,000 per employee.
  • The ERCs are claimed by amending your Form 941 payroll tax reports.
  • If you receive ERCs, you must then amend your income tax return(s).

Why should you hire only a CPA for this?

  • The federal government has extended the audit window for ERCs to 10 years!
  • All claims over $100,000 are being audited.
  • CPAs with audit experience understand how to be prepared for an audit.
  • We prepare the 12 types of workpaper you’ll need to defend an ERC claim.

Who might be eligible for ERCs?

  • Any business or charity with payroll if:
    • Its revenue fell because activity was suspended or limited by government Covid order, or
    • Its revenue was cut 50% or more in a 2020 quarter, or
    • Its revenue was cut 20% or more in a 2021 quarter
  • The business payroll must be greater than:
    • Payroll used for PPP (Paycheck Protection Program) forgiveness
    • Payroll for a majority owner and owner’s descendants, siblings, ancestors

How much time do you have to act?

  • Claims must be filed before the statute of limitations on refunds:
    • For 2020 credits, by April 15, 2024
    • For 2021 credits, by April 15, 2025

Would you like a free consultation with a CPA?

  • Michael Gray has focused on ERCs for dentists, orthodontists, and oral surgeons but can assist the owners of any business under 100 employees
  • He can explain ERCs, the claim process, and answer your questions quickly
  • Meet face-to-face, via video conference, or visit on the telephone
michael gray - cpa & employee retention credits specialist

Call Michael today for an appointment!
Gray & Associates, CPA, PC
Since 1993

(512) 260-0112 or (512) 267-2272

Leave a Comment