Have you heard about the payroll tax rebate?
Good News! There is a payroll tax rebate that many of our local businesses qualify for. This rebate has not been widely publicized but is available to most companies that had less than 500 employees during COVID shutdowns. To simplify this rebate for our clients, we partnered with a company called Innovative Refunds (IR), which specializes in assisting businesses through this process. There is a fee involved (25% of the processed return) only if you qualify, which is taken directly out of the rebate and will cost nothing out of pocket. It takes an average of 12 minutes through the IR portal to complete the initial form! Please see below for more information and a link to the application. Please note that you can also contact your company's CPA to see if they are able to assist you.
What is the ERC - Employee Retention Credit?▼
ERC is a payroll tax refund born out of the same COVID relief bill as the Paycheck Protection Program (PPP), which incentivized businesses who kept employees on payroll during the pandemic. Originally, companies were limited in their ability to claim either PPP or ERC, but not both. In early 2021, the rules changed and now businesses can claim ERC even if they received PPP funds.
How do I know if I qualify?▼
The rules provide two different ways to qualify based on negative impacts from COVID. In 2020 and/or 2021, businesses that experienced either: (a) limitations of commerce, travel or group meetings, or (b) a significant decline in revenue, qualify for this rebate.
How is ERC different from PPP?▼
PPP was a forgivable loan. ERC returns already-paid payroll taxes back to your business. Once you receive the ERC funds from the US Treasury, no further action is required on your part.
How is the refund calculated?▼
Determining the proper amount that you are entitled to is a complex accounting process that requires a specialist in this area. One of the reasons that we partnered with Innovation Refunds is that their expert CPAs and Tax Attorneys determine exactly how much money your business is eligible to receive.
What is the fee and when do I pay it? ▼
There is no upfront cost or obligation to analyze the required documents, provide an initial tax analysis and produce an estimate. Once you agree to claim your refund, the fee is 25% of the total refund amount and is due only when you receive each of your refund checks. This fee includes a dedicated CPA or Tax Attorney who specialize in qualifying, substantiating and claiming tax credits, as well as Audit Protection if needed.
Could my CPA do this for me? ▼
With ever-evolving areas of guidance, ERC involves numerous complexities to consider when determining eligibility, employee count thresholds, certain wage exclusions, accurate refund calculation and PPP fund appropriation timing. Having successfully processed hundreds of ERC claims for business owners nationwide, IR is very successful in generating this return for businesses.
What if I wait to claim ERC? ▼
While you do have the next two years to claim ERC for both 2020 and 2021, just as PPP ran out of allocated funds, ERC could as well. Don’t delay; be sure to claim your spot in line and receive the funds rightfully owed to you.