Have You Recovered Your Overpaid Payroll Taxes Through the Employee Retention Credit?
September 9, 2022
Courtesy of SBAM Approved Partner, ERC Today
Here it is in a nutshell…
If you are an employer with 5 or more W-2 employees and your operations during the pandemic were affected by government order, OR your revenue loss in any quarter of 2020 was 50% less than that same quarter of 2019, OR your revenue loss in any quarter of 2021 was 20% less than that quarter of 2019, you were eligible to take credits against your payroll taxes payable during that time.
You don’t know if you took those credits you were entitled to? Go look or ASK your financial advisor or accountant! The good news is that if you didn’t use the credits at that time, the IRS will allow you, for a limited time, to go back and recover those credits—issuing you a cash refund to use however you wish. How much you ask? Up to $5,000 per employee in 2020 and up to $21,000 per employee in 2021. Sound worth your while??
Too good to be true?
Although a lot of people think it is too good to be true, it was one of the measures enacted in the series of CARE Act legislation to incentivize small and medium-sized employers to keep W-2 employees on their payroll and off unemployment (more expensive). It was in their best interest, but they didn’t tell anybody about it. So, unless you are an accountant or financial professional, you likely never heard of it—till now. It is called the Employee Retention Credit or ERC for short, and I am sure you’ve begun seeing information about it by now.
Even companies that received PPP funding are eligible to reclaim their ERC. But, unlike PPP funding, there is no obligation to pay anything back. It is your money that you overpaid in payroll taxes being returned to you!
As with anything IRS, complicated!
However, as with anything involving the IRS, the determination of eligibility and quantification is a moving target from quarter to quarter of 2020 and 2021—the IRS regs defining “qualified employees” are over 100 pages! It often is easier to compute the credits you are entitled to and to MAXimize that amount, if you know the regulations intimately. A lot of business employers and their financial advisors turn to specialized accounting firms for just that assistance. And it is a wise move and financially rewarding to do so!!
And, for more recently incorporated entities, the legislation defined a Recovery Startup Business (started after Feb. 15, 2020) or RSB as another way to access the ERC and its recovery. Since newer companies won’t have financials to compare, they only need annual revenue under $1M to qualify.
ERC recovery is available to for-profits and non-profits alike. Likely industry sectors for ERC recovery include restaurants, food services, vending services, gyms, bars, retailers, charter schools, car dealers, manufacturers, and others.
ERC recovery mostly benefits companies with 5 or more W-2 employees because business owners and family members are excluded from the calculations involved.
Don’t delay… apply today!
Check with your CPA or tax advisor to see if you qualify. If you need additional help, SBAM’s approved partner, ERC Today is a specialized accounting firm that does nothing but ERC recovery for small and medium-sized businesses. ERC Today provides a no-cost opportunity for SBAM members to see if their company qualifies and learn how much you might recover from these credits for your W-2 employees.
ERC Today specializes in (i) determining eligibility and (ii) maximizing the amount of these credits for refund. ERC Today works only on a contingency fee basis; they don’t get paid unless or until you get paid! And, importantly, ERC Today stands behind its work! As a bonus, qualifying SBAM members get a $250 bonus in addition to their refund for signing up with ERC Today!
There is a limited time to claim recovery of your Employee Retention Credits and get a refund of your overpaid payroll taxes. Feel free to contact our SBAM ERC Today Senior Consultant, John Galles at 517-798-1784 or firstname.lastname@example.org if you have particular questions.
If you are a company with 5 or more W-2 employees, start your application at the secure ERC Today portal: https://erctoday.com/sbam/. If you’d like to read more about ERC recovery, be sure to check out the SBAM membership perk at: https://wwwsbam.org/employee-retention-credit/.