ERC Tax Credit:
Offset payroll tax and get cash back; No cost review – we’ll do the heavy lifting
The Employee Retention Credit (ERC) is part of the CARES Act. It is a fully refundable tax credit that incentivizes employers to retain staff by providing specific tax relief.
If a business qualifies for $100,000 in credit and owes $25,000 in payroll taxes, they get a $75,000 cash refund advance before the end of the quarter. 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 (slightly different rules apply to 2020, which can be claimed retroactively).
The challenge: it’s a complex process
- Forms and rules are dynamic
- Payroll providers cannot qualify employees
- Wages cannot conflict with PPP forgiveness
- Subject to IRS audit, which could add costs to defend
- The credit is only available through 6/30/2021
Get a no cost review! We’ll do the heavy lifting to…
- Determine your eligibility
- Correspond with government agencies and your payroll provider
- Coordinate PPP forgiveness with your company / CPA
- Provide a no-cost audit defense
- Our payment is based solely on the amount we recover on your behalf and will not exceed 15%.
Get started
Ready to check on your eligibility (at no cost to your business)?
- Step 1: Email: [email protected]
- Step 2: A member of our team will contact you to answer any questions and get you signed up.
Examples of credit potential through the Employee Retention Credit (ERC) part of the pandemic relief package passed through congress, the CARES Act.
Businesses of all types can benefit from work opportunity tax credits. Here are some examples from fitness groups, retailers and manufacturers who utilized the CARES Employee Retention Credit.
Fitness Franchise
- 400+ employees
- 2020 Credit $335,000
- 2021 Credit $2,000,000+
11 Store Retail Chain
- 200+ employees
- 2020 Credit $672,000
- 2021 Credit $2,200,000+
Frequently Asked Questions Employee Retention Credits through the CARES act
2020 RULES
Who is Eligible under the 2020 ERC rules?
Employers are eligible if their business operations have been fully or partially suspended as a result of a government order, or if they experienced a 50% reduction in quarterly receipts compared to the same quarter in 2019.
Who is the ERC tax credit for?
- 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.
How much time is required for a company to work with ACC on reducing Temp Staffing bills?
Every engagement is different, but reducing costs in the temp worker category would require roughly 10 hours of an internal stakeholder’s time over the course of 4 months.
2021 RULES
Who is Eligible for 2021?
Employers are eligible if their business operations have been fully or partially suspended as a result of a government order, or if they have experienced a 20% reduction in quarterly receipts compared to the same quarter in 2019.
In 2021, who can use this benefit?
- 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.
What would preclude my business?
There is no limit on the number of employees or the size of your company that prevents you from taking your credit.
What does ERC stand for and what is it?
It is a fully refundable tax credit that incentivizes employers to retain their staff during the Coronavirus pandemic by providing specific tax relief. CARES stands for 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.
WORK OPPORTUNITY TAX CREDITS (WOTC)
The Work Opportunity Tax Credit (WOTC) is a Federal tax credit available to employers for hiring individuals from certain targeted groups who have consistently faced significant barriers to employment.
WOTC joins other workforce programs that incentivize workplace diversity and facilitate access to good jobs for American workers.
The Protecting Americans from Tax Hikes Act of 2015 (the PATH Act) retroactively allows eligible employers to claim the Work Opportunity Tax Credit (WOTC) for all targeted group employee categories that were in effect prior to the enactment of the PATH Act, if the individual began or begins work for the employer after December 31, 2014 and before January 1, 2021. For tax-exempt employers, the PATH Act retroactively allows them to claim the WOTC for qualified veterans who begin work for the employer after December 31, 2014 and before January 1, 2021. The PATH Act also added a new targeted group category to include qualified long-term unemployment recipients.
Our process delivers 3X – 6X annual tax credits vs. other channels
- Cut through screening, filing and reporting; we manage the entire process for you.
- You have 28 days from hire to submit the requisite forms in order to receive the credit.
- Employees must work a minimum of 120 hours to claim credits.
WOTC rewards employers for hiring:
- Military veterans
- Long-term unemployed
- Disabled individuals
- Food stamp (SNAP) recipients
- Other public assistance participants
Get up to $9600 in tax credits per employee!
CASE STUDY
Quick service restaurant franchisee employing 860 people
BEFORE ACC WOTC Assistance:
Annual Tax Credit Achieved = $43,000
AFTER ACC WOTC Assistance:
Annual Tax Credit Achieve = $250,000
Disclaimer: ACC and its partners do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice.
