ERC tax refund 2023 - real deal or too good to be true?
What is ERC Refund?
ERC stands for Employee Retention Credit Program which is a refund scheme delivered by the US federal government to small businesses. The purpose of it was to encourage employers to keep their employees on payroll during the pandemic. ERC gives eligible employers payroll tax credits for wages and health insurance paid to employees.
You may or may not have heard about it.
There is a lot of confusion about the program for several reasons.
The US Congress passed this program during the Covid-19 pandemic and originally, it covered the period between March 13, 2020, and December 31, 2020.
Although the Infrastructure Investment and Jobs Act which was signed into law in November 2021 put an end to the ERC program, it is still possible to claim ERC retrospectively for up to three years.
ERC was released at the same time as PPP Loans which the banks provided during Covid-19. Whilst PPP Loans got a lot of coverage and everyone was talking about it, the same was not true for ERC.
In a way, at the time it did not matter that much because, under the Trump administration, a small business could only get either one or the other.
The Biden administration wants to further encourage small businesses' growth because it believes they are the building stones of whole economic growth. And so, the time a small business is allowed to apply has been extended.
Who Is Eligible For The ERC Refund?
Even if a business applies for a PPP loan, it can apply for ERC tax credits too.
There are no limits on the size of the business to be able to apply, but small and large companies are treated differently.
Also, different rules apply depending on whether you are claiming for 2020 or 2021.
How To Apply For The ERC Refund.
As of today, only about 16 percent of companies claim ERC they are rightfully entitled to.
Not many CPAs know about these changes and vast opportunities for claiming ERC retroactively.
These pages will provide additional background information on recent developments with the ERC Refund Program:
There is a considerable amount of paperwork to fill. It can be quite a complex and daunting task for many. In a situation like this, it is always advisable to find someone with relevant experience and who knows the process inside out.
Bottom Line Savings
Bottom Line is a company that has been working on behalf of small businesses throughout the country for the last 15 years. They specialize in getting government money to the businesses that are entitled to it. So far, Bottom Line has claimed 1.8 billion in ERC funding for their clients. The average claim per employee is $11000. The amount can vary depending on the particulars mentioned above.
