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Understanding Employee Retention Credit Qualifications

Employee Retention Credit (ERC) qualifications refer to the criteria that businesses must meet to avail themselves of this tax incentive, designed to retain employees during challenging times. To qualify, eligible employers must have experienced significant revenue reduction or a full/partial suspension of operations due to the pandemic. The credit aims to offset wage expenses, encouraging businesses to retain their workforce. Qualifying employers can claim up to a certain percentage of qualified wages paid to employees, benefiting both businesses and workers alike. ERC qualifications provide

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Understanding Employee Retention Credit Qualifications

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  1. Employee Retention Credit - Explained Presented by: Olivia Wilson www.onpointerc.com

  2. INTRODUCTION OF ERC The OnPoint (ERC) Employee Retention Credit is a refundable tax credit created under the terms of the CARES Act that rewards employers with up to $26,000 for every employee retained during the Coronavirus pandemic. The ERC program is part of the greater pandemic relief fund that helps provide financial support for struggling business owners following the outbreak of Covid-19.

  3. HOW TO CLAIM THE ERC CREDIT? 1. Erc tax credit eligibility: First, ensure that your business qualifies for the ERC. Check if you meet the criteria, including being an eligible employer and experiencing a significant decline in revenue due to the pandemic. 2. Calculate the Credit: Calculate the credit amount based on qualified wages and other eligible expenses. Seek guidance from a qualified tax professional or the IRS if needed. 3. Offset Payroll Taxes: The ERC is a refundable tax credit, which means that it can be used to offset payroll tax liabilities. If the credit amount exceeds the tax owed, you may be eligible for a refund.

  4. WHO IS ELIGIBLE FOR THE EMPLOYEE RETENTION CREDIT? To qualify for the Employee Retention Credit under the CARES Act, businesses were required to meet one of the following conditions: Experienced a full or partial suspension of business operations due to a government order. Suffered a decline in revenue of in 2020 and/or in 2021, when compared to the same quarter in 2019. The business must be in operation and have employees on its payroll during the applicable periods.

  5. HOW LONG IS MY REFUND EXPECTED TO BE? When dealing with the government, it is hard to put an exact number on processing times. As of 2023, the IRS refund timeline averages between 4-6 months. (certain refunds can take up to 12 months) Some clients receive partial payments paid out quarterly, while others receive a lump sum payment. Every situation is different. We know that time is literally money, so we take every step and precaution to decrease processing times.

  6. Business Continuity: With the additional financial support, businesses can maintain their operations and stay afloat during difficult times. Financial Support: The credit provides a significant financial boost to eligible businesses, helping them manage their payroll expenses effectively. Benefits of Employee Retention Credit Employee Retention: By offering financial incentives, the ERC encourages employers to retain their employees, thus reducing layoffs and supporting the workforce. Tax Relief: The ERC provides a dollar-for-dollar reduction in the employer's payroll tax liabilities, directly impacting the bottom line.

  7. QUALIFIED WAGES OF ERC The Employee Retention Credit applies to qualified wages paid to eligible employees during the designated period. Qualified wages include: Health Benefits: The credit covers a portion of the cost of providing health benefits to employees. Employer Contributions: The credit also includes the employer's share of Social Security and Medicare taxes on qualified wages.

  8. THANK YOU! CONTACT US FOR MORE INFORMATION https://www.onpointerc.com/

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