Trying to keep a small business afloat through a worldwide pandemic is not something that most business owners ever imagined that they would have to face. Navigating the unsteady economic landscape over the last almost year and a half has tested the patience and resolve of even the most steadfast business owners.

Company owners have had to deal with unprecedented challenges including mandatory shutdowns, capacity restrictions, and worldwide supply chain disruptions. All of these variables are enough to dismantle businesses that have been built on strong foundations and have been around for decades. With these facts in mind, the federal government stepped up with several legislative acts designed to provide a lifeline to businesses that were gasping for air.

Programs like PPP and loan forgiveness initiatives provided some breathing room for small businesses that saw their profits quickly falling into the red and who were tasked with making very difficult choices when it came to staff retention. Perhaps, one of the most helpful programs to come out of Covid assistance legislation has been ERC which stands for Employee Retention Credit.

ERC started out as a more limited assistance program aimed at helping companies that employed 100 full-time or full-time equivalent (FTE) employees. However, as the pandemic has raged on longer than anyone anticipated, several revisions have been made to ERC to expand eligibility to far more businesses with the aim of helping them to keep their employees paid even when they are dealing with pandemic-related shutdowns or challenges.

One of the things that many business owners are wondering is how much they can qualify for under the Employee Retention Credit. In the most recent versions of the ERC, companies that employ 500 or fewer full-time or FTE employees are now eligible to apply for credit assistance in the form of reduced employee tax deposits or an advance credit from the IRS.

If a company meets the employee threshold and has a loss of 20% or more in receipts between Q1 of 2021 and Q1 of 2019, they can claim up to 70% of qualified expenses up to $10,000 for each person that is employed every quarter. That means that a small business could potentially be eligible for $7000 per employee per quarter up to $28,000 annually.

 These numbers can quickly add up for companies that have a larger payroll. If your company was not in existence in 2019, that doesn’t mean that you are out of luck. If you are showing the 20% quarterly decline due to pandemic issues, you may still be eligible for assistance under the ERC guidelines outlined in the CARES Act.

We know that deciphering all the intricacies of eligibility for ERC and other pandemic assistance programs can be a headache for small business owners. That’s why the knowledgeable and helpful team and Seek Business Capital is standing by to answer your call for help today. We can help you get the assistance you need quickly and easily.

For the last nearly year and a half, the world has been struggling to deal with the Covid-19 pandemic that just doesn’t want to let go. Many small businesses have been forced to close their doors, shattering the dreams of once-prosperous business owners and forcing thousands of former employees into the world of unemployment. It seems that there is no segment of business or country that has escaped the wrath of Coronavirus.

With the knowledge that so many companies were struggling to pay their bills and employees due to pandemic restrictions such as forced shutdowns and capacity restrictions. The federal government worked to pass several pieces of legislation in the name of Coronavirus aid for small businesses. In addition to PPP and loan forgiveness, the Employee Retention Credit (ERC) program was introduced in 2020.

ERC is aimed at giving companies of fewer than 500 full-time or full-time equivalent (FTE) employees credit in the form of lowered quarterly employment tax deposits or credit advances from the IRS on qualifying expenditures. Employee wages and money that a company pays pre-tax towards an employee’s health plan are examples of such qualifying expenses.

The rules of the ERC state that companies that meet the qualifications for pandemic-related hardships due to loss of revenue can claim 70% credit up to $10,000 for each employee each qualifying quarter. If you quickly do the math, this means that a company can get up to $7,000 per employee every quarter for a maximum amount of $28,000 annually. That is a very helpful chunk of change.

With the ERC program, one of the most frequently asked questions is if it has to be paid back. The good news is that this answer is no. The ERC is considered a credit and not a loan. Employers are required to withhold a certain amount of employment taxes every pay period for every employee. These withheld wages are qualified wages that count towards the ERC calculation.

These withheld wages are then paid by the employer to both the federal unemployment tax (FUTA) and Social Security taxes. The Employee Retention Credit program, along with other tax credits were put into place by the government to allow small businesses to be able to hold onto some of the money they would have had to pay to FUTA and Social Security by lowering the rate they were taxed at. In addition, if an employer is eligible for a greater tax credit than what they paid out, they can get a check sent to them for the difference.

While the reduced tax bill gives immediate liquidity to a small business’ cash flow, operations that are requesting a payment from the IRS for additional credit money can expect to wait 3-4 months at times for the credit payment to be sent.

At Seek Business Capital, we know the intricacies of applying for and receiving tax credits such as ERC for small businesses. Don’t wait any longer to get the cash relief you need and deserve for your small business. Pick up the phone and call our team today!