How to Claim the ERC Tax Credit

Did you shut down or slow down in 2020 or 2021 because of the COVID-19 pandemic? Were you required to make these changes thanks to a federal government ruling? Did you keep employees on the books anyway?

If so, the CARES Act is here to help. This Act established that many businesses in the US could file for the employee retention tax credit. Many still haven’t.

Today, we’re going to talk about how to file for the ERC tax credit. From determining eligibility to filling out paperwork, we have you covered.

Read on to learn the easiest way to file for the ERC tax credit.

Determine Eligibility

Though most industries meet ERC requirements, not all individual businesses have ERC eligibility. In order to file for the ERC tax credit, your business must fall into one of these two categories:

• your business shut down for at least one quarter due to federal pandemic initiatives
• your gross receipts in 2020 or 2021 were 20% less than they were in 2019

Keep in mind, the ERC provides financial support for businesses that fall into one of these categories and continued to pay employees. If your response to a shutdown or slowdown was to lay off your staff, you won’t receive the ERC tax credit.

Determine Qualified Wages

To calculate qualified wages, you will need to start with the amount of time that your business fell into one of the two aforementioned categories. In other words, you will determine many quarters:

• a government edict closed or limited your business
• your gross receipts were 20% lower than they were pre-pandemic

You will then calculate the wages paid during that time. However, how much you can claim depends on a variety of factors, including the year you’re filing for and the size of your business.

Work With a Professional

You can try to navigate the IRS requirements and paperwork on your own. However, things get complicated quickly, and it’s never easy to get in touch with an IRS rep to ask questions or track the status of your tax credit. How can you make it easier to file ERC claim?

The best option is to work with tax professionals specializing in ERC claims. They can help to determine if you qualify for Employee Retention Credit, calculate qualified wages, and file the paperwork for you. Working with a professional will cut down on the confusion that can lead to mistakes and ensure that you get the highest tax credit possible.

Claim Your ERC Tax Credit Today

If your business suffered from the COVID-19 pandemic but you continued to pay employees, it’s time to find out if you’re eligible for the ERC tax credit. The best way to start is by contacting professionals that can navigate the process for you.

Looking for more ways to secure your business? Take a look at our business section to discover the latest industry breakthroughs, marketing tips, economic trends, and beyond.

Bobby Jansson

Having completed my education in English, I’ve cultivated a successful career as a content writer. My tenure includes valued collaborations with distinguished professional organizations, reflecting my commitment to producing high-quality content.
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