Employee Retention Tax Credit
What is the Employee Retention Tax Credit?
ERC is not a loan; it is a refund for wages paid to qualified employees. Unlike the Paycheck Protection Program (PPP), there are no restrictions on how you may use these funds. That said, it's very important to provide the documents related to PPP and the amount forgiven because they factor into how much of the credit you are eligible for.
See below the list of documents we'll need to complete our due diligence and calculate the credit amount to be refunded to you:
Payroll Data
Form 941 Quarterly Tax Returns for 2020 (Q2, Q3, Q4) and 2021 (Q1, Q2, Q3, Q4)
Payroll Summary Details showing the total amounts paid to each employee.
It should show the total for each employee for the following specified time periods:
1) March 13 – 31, 2020
2) Q2 – 4/1/2020 – 6/30/2020
3) Q3 – 7/1/2020 – 9/30/2020
4) Q4 – 10/1/2020 – 12/31/2020
5) Q1 – 1/1/2021 – 3/31/2021
6) Q2 – 4/1/2021 – 6/30/2021
7) Q3 – 7/1/2021 – 9/30/2021
8) Q4 – 10/1/2021 – 12/31/2021
To ensure proper format, we're happy to pull this data for you...
Many of our client choose to furnish login credentials to their payroll software.
If employer-paid healthcare/insurance is not included in the payroll data, we will need to collect that information as well.
PPP Loan Information (if applicable)
PPP1 and PPP2 loan amounts/application
Forgiveness Application Details
2020 & 2021 Profit and Loss Statements (by quarter)
We will schedule a time to discuss your business operations in greater detail and document the effect of COVID-19 of those operations.
With this information we will not just qualify you for ERC but we will also work to optimize the amount of the credit you're eligible for.
Here's a link to the directly IRS to learn more about ERC. I strongly hope you'll consider taking advantage of this tax credit as it is meant for small businesses like yours.
How much does it cost?
At NFS, we understand the confusion surrounding ERC and the concerns of small businesses about claiming it. That's why we process claims in-house with transparent, flat fees based on eligible quarters and employees, eliminating any risk of unfair percentage charges.
We're passionate about helping eligible businesses get the full benefit of this valuable tax credit. Many miss out due to misinformation or fear, leaving money on the table that could strengthen their financial position and prepare them for economic challenges.
See the difference a fair approach can make:
We recently helped a company with 85 employees claim $1.4M in ERC. A previous firm wanted a 20% contingency fee ($300k), while our flat fee was just $75k. Plus, through strategic PPP reconciliation, we boosted their credit by $120k beyond their initial quote. That's a total benefit of $345k saved and earned!
Remember, amendments must be made tax returns for the years in which you claim the credit, which may increase your tax liability. In the example provided, it was more that offset by the savings. Let us help you navigate these complexities and maximize your ERC potential.
Questions? We're here to help. Also, we'll also be releasing an Excel ERC Calculator soon to estimate your potential credit.