Nine Important Considerations for Employee Retention Tax Credit Eligibility: Part 2

Too many employers are unaware of the Employee Retention Tax Credit (ERC or ERTC) or mistakenly assume they don’t qualify. Even employers that received Paycheck Protection Program (PPP) loans are claiming ERCs of thousands of dollars– some are claiming an ERC of $1 million or more. With assistance from HR and payroll experts like MP, the ERC process is simple and takes less than an hour for employers. In part two of this series (read part one here) MP’s HR services experts share four reminders about this substantial financial aid program.

1. Employers are eligible to claim an ERC even if they received a PPP loan.

While employers that received a PPP loan in 2020 couldn’t initially claim an ERC, this criterion was amended. Employers who received PPP loans are still able to claim an ERC for 2020 or 2021. Note that depending on how they’re spent, PPP loan funds do restrict the amount of an ERC claim. Employers maximize the amount they claim by strategically allotting PPP loan funds (or working with ERC experts like MP).

2. Keep records for ERC claim substantiation.

Employers must keep records to substantiate their ERC claims. These records must be on hand and accessible for at least five years. Employers who use a payroll system like MP’s will easily access and store this data.

3. It will take some time to recoup funds, even if an employer uses a Form 7200 or 941X.

Currently, an ERC claim takes around four months to process. MP’s ERC services assist with streamlining this process, ensuring that employers make a strong case for their claim and include all data in the optimal format.

4. The ERC isn’t a loan.

MP has helped hundreds of clients claim ERCs of thousands of dollars. Some employers have claimed ERCs of over $1 million. The ERC is not a loan. Nothing needs to be paid back or forgiven, as with PPP loans. The ERC is a program that assists employers via significant pandemic aid. In some cases, MP clients claimed an ERC even if they weren’t affected heavily by the pandemic or have since overcome their initial challenges. Reach out to MP today to discuss your eligibility for an ERC.