What the ERC Tax Credit Is

The Employee Retention Credit (ERC) is a way for business owners to get money they paid to employees back in the form of a tax credit for losses they suffered during covid.  Losses for the ERC tax credit can be financial, logistical, or operational.  And ERC tax credits apply to both for profit and non-profit organizations.

But it isn’t on the money paid to your employees, it is a refund on the taxes that were collected by the government so that you can reallocate the money back into your business, or how you see fit.  If you had employees that were supposed to meet with clients or exhibit at a tradeshow but couldn’t, your business may qualify.  And the same goes for when you paid your cooks, servers, and bar staff if you couldn’t open your restaurant, or they couldn’t serve clients and you kept them on payroll.  

Interesting fact: 90% of the companies that qualified and received ERC tax credits saw profit increases during the pandemic, and qualified because the cost of doing business was also higher.

ERC tax credits are not loans as the recipient does not have to pay the money back to the government.  That is why it is similar to a grant, but unlike a grant this is a tax credit and you can use the money as you see fit.  Grants must be used for specific purposes and must follow mandated restrictions by the issuing party.  But like a grant, not everyone qualifies for this government funded credit, and that is why it is important to talk to an ERC company like ERC Guaranteed before you try to claim yours.

A legitimate ERC tax credit company will have your claim insured in case of an audit, have licensed accountants on staff, and never outsource the work to a third party or part time employee.  The dedicated staff that specializes on the ins-and-outs of the ERC tax credit helps to ensure accuracy and provides realistic expectations on your ability to qualify. The level of knowledge is what leads to legitimacy and is why reputable insurance companies will underwrite the deal.  If there is no insurer, there may a lack of credibility in the ERC tax credit company.

And don’t let the word "credit" in ERC tax credits scare you. This is not like a credit card where you’re given credit to spend and are required to pay a fee back and with interest.  It is money you are refunded by the government. The word tax credit is simply a financial term used by accounting professionals and the government. Now that you know what it is, it is time to prepare you to claim yours.

One of the most important things to do before reaching out to an ERC credit company is to look at your financial records.  Employee retention tax credit is only for wages paid between March 13th, 2020 and December 31, 2021.  If the government did not collect a wage tax during this time frame, you are not eligible for the ERC tax credit and you'll be wasting your time.  If you are paying employee taxes during this time frame, then good news.  As a business owner you can claim up to $26,000 per employee that was paid during this time frame.  

So if you had 6 employees affected, and you qualify for this program, you could potentially get an ERC tax credit of $156,000 to put back into your business.

And now you know what the ERC tax credit is, who can qualify, and what to look for when finding a service provider.  If you’re ready to see if you qualify, give us a try.  We have a 100% success rate in getting business owners like you their ERC tax credits.  Fill out the form below or call us at (888) 210-8870 today.