FAQs

EMPLOYEE RETENTION CREDIT FAQ

What Is the ERC?

The Employee Retention Credit (ERC) is a tax credit created to incentivize employers to retain their employees during the COVID-19 pandemic.⁣ It provides eligible employers with a credit against certain employment taxes equal to a percentage of qualified wages paid to employees.⁣ The credit amount can be up to $26,000 per employee for wages paid between March 12, 2020 and December 31, 2021.⁣

Do I qualify for ERC?

  1. You should qualify for ERC if your business experienced any of the following in the qualifying quarters of 2020 and/or 2021:
    1. Full or partial shut down⁣
    2. Supply chain interruption⁣
    3. Inability to work with vendor(s)⁣
    4. Inability to access equipment⁣
    5. Reduction of services or goods⁣
    6. Loss of revenue⁣
    7. Cancellation of new meetings and/or projects⁣
    8. Operational changes to accommodate sanitation & social distancing

What’s the catch?

There is no catch. Many business owners see ERC as too good to be true. The complicated tax jargon and processes can be confusing for business owners and CPAs without expertise in this specialized area. Because of this, most qualified businesses never apply.

How much does it cost?

  1. $2,000 fully refundable deposit to apply.
  2. 20% of the credit awarded is paid to cover the fees and staffing of our expert partners as well as any ongoing support you might need in the unlikely event of an audit.

Why is there a deposit?

We discovered that clients were more attentive and submitted tax paperwork more quickly when we required a deposit.

How long until I get my credit?

14+ Weeks after IRS submission.

Why Connect MyBiz?

Not all CPAs are properly educated on ERC legalities. Through our experience in the financial world, we’ve accumulated connections with the best professionals in the industry. We only work with ERC specialists we know and trust. As warned by the IRS there are many third-party companies selling ERC services without the competence to do so. Be very careful who you choose to work with.

When was ERC first introduced?⁣

ERC was first introduced in the CARES Act on March 25, 2020.⁣

What are the ERC wage benefits for 2020 and 2021?⁣

A: For 2020, the ERC provides a wage benefit of 50% with a maximum of $5,000 per employee. For 2021, the benefit is increased to 70% with a maximum of $21,000 per employee – potentially totaling $26,000 per employee.⁣

Is ERC a loan or a tax credit?⁣

ERC is a fully refundable tax credit against the employer portion of Social Security/Medicare and is not a loan.⁣

⁣How is ERC claimed?⁣

ERC can be claimed by filing amended 941-X quarterly returns and taking the ERC credit on lines 18 & 26.⁣

⁣What are the qualifications for ERC?⁣

The qualifications for ERC are complex and include full or partial suspension of business services due to government shutdowns, gross receipts reduction, supply chain interruption, changes in business operations to accommodate COVID-19, and more.⁣

Do Connect MyBiz experts charge for filing the ERC claim?⁣

Our experts charge a contingency fee of 20% on the amount of funds delivered, with a $2,000 deposit to get started on the IRS claim. This deposit is covered by their 100% Money Back Guarantee.⁣

Can a client's CPA file for ERC?⁣

A client’s CPA can file for ERC, but it is not a typical service most CPAs provide since the ERC credit is taken on payroll returns rather than business income tax returns.⁣

Can a business still qualify for ERC if it took PPP?⁣

Yes, under the Consolidated Appropriations Act, businesses can now qualify for ERC even if they received a PPP loan, but the ERC will only apply to wages not used for the PPP.⁣

Can a business still qualify for ERC if it remained open during the pandemic?⁣

To qualify, the business must either experience a 20% decline in gross receipts or change business operations due to government orders.⁣

⁣Can a business still qualify for ERC if its revenue went up in 2020?⁣

Yes, a business can still qualify for ERC if it experienced a full or partial shutdown of its business due to COVID-19 restrictions or had an increase or reduction in revenue.

⁣Will the IRS audit me?⁣

Although it’s always possible to get audited by the IRS, it’s unlikely.⁣ In fact, for employment-related tax returns, the audit rate was less than 3.8 per 1,000 when data was last available.⁣ However, if you, unfortunately, get audited and need support in front of the IRS, we will provide all of the required documentation to back up our work.⁣