An ERTC lawyer is an expert in the complexities of the Employee Retention Tax Credit (ERTC) scheme, a measure to help businesses in times of financial difficulty. By leveraging their expertise, companies can strategically navigate the complexities of this program, ensuring they maximize their potential benefits while adhering to the stipulated regulations.

How Can An ERC Lawyer Help You With Your ERTC Claim?

An ERC Lawyer is instrumental in the Employee Retention Tax Credit claim process from start to finish. They can help determine your eligibility for the retention tax credit ERTC based on a detailed understanding of your business operations and financial situation. Having an expert on your side means less chance of missing out on potential credits due to overlooked qualifying activities.

Moreover, experienced tax attorneys can help compile and submit the documentation required for the ERC tax refund. This includes payroll records, financial statements, and other documents proving the impact of the pandemic on your business operations.

Understanding the technical language of tax law can be overwhelming. An Employee Retention Credit Lawyer can translate this jargon into understandable terms. This can help you make informed decisions and utilize the ERTC program fully.

Most importantly, an Employee Retention Tax Credit Lawyer can represent your interests in case of disputes or audits by the IRS. With an expert, you can be confident that any issues will be handled professionally, minimizing the risk of penalties or claim rejections.

So, take the tax credit claim process with help. Experienced tax attorneys can provide the expertise and support you need to optimize your claim and gain the financial relief your business deserves. Take the first step today and explore how an ERC Lawyer can help your business thrive.

What Are The Qualities To Look For In Hiring An ERC Lawyer?

When looking for an ERC lawyer to assist you with your Employee Retention Credit refund, here are the qualities to look for:

Expertise in Tax Law

When hiring an experienced tax attorney, a deep understanding of tax law is crucial. They should have a proven track record in dealing with similar cases and staying updated with the latest refundable tax credit program changes.

Excellent Communication Skills

A great ERC Lawyer should be able to explain the complexities of the Employee Retention Tax Credit in simple, understandable terms. This ensures you have clarity about the process and can make informed decisions.

Outstanding Analytical Skills

The refundable credit process involves examining a lot of financial and operational data. A skilled ERC Lawyer should have strong analytical skills to interpret this data effectively and identify potential qualifying activities for your Employee Retention Tax Credit claim.

Strong Negotiation Skills

In case of an audit or dispute with the IRS, your lawyer must negotiate on your behalf. Their negotiation skills can make a significant difference in resolving such issues.

Proactive and Detail-Oriented

An excellent ERC lawyer will take the initiative to update their clients on the status of their claims. Being detail-oriented is also critical, ensuring all necessary documentation is accurately presented and exploring all potential benefits.

High Ethical Standards

Lastly, a top-notch Employee Retention Tax Credit Lawyer must adhere to the highest ethical standards, maintaining complete confidentiality, dealing honestly and transparently, and prioritizing the client's best interests.

What Are The Businesses That Qualify For ERTC?

A business qualifies for ERTC if it falls on the below criteria:

Businesses with Operations Partially or Fully Suspended Due to Government Orders

Any company that had its operations entirely or partially suspended due to a COVID-19-related government order may be eligible for the tax credit. This includes any company, regardless of size, that had to close its doors or significantly limit its services in response to a governmental mandate.

Businesses Experiencing Significant Decline in Gross Receipts

Eligibility for the ERTC is also extended to any eligible employer that experienced a significant decline in gross receipts. The IRS defines this as a decrease in gross receipts of more than 50% from the same quarter in 2019 to that quarter.

Essential Businesses

Interestingly, even 'essential businesses' that remained open during lockdowns might qualify. This depends on whether governmental orders had an impact on their operations in other ways, such as forcing them to cut back on business hours or restrict customer capacity.

Non-profits

Non-profit organizations are included too. If they satisfy the requirements for the cessation of activities or a considerable decrease in gross receipts, they may be eligible for the ERTC. This serves as a financial relief to such organizations, helping them continue to provide pivotal services to their communities during trying times.

What Periods Are Taken Into Account For Qualifying Wages Under The ERC?

Several pieces of legislation were passed between March 2020 and December 2021 to make the ERC available to eligible employers. Below are the periods:

CARES Act (March 13, 2020–December 31, 2020)

Consolidated Appropriations Act (January 1, 2021–June 30, 2021)

American Rescue Plan Act (July 1, 2021–September 30, 2021)

Recovery Startup Business Act (July 1, 2021–December 31, 2021)

How Is Employee Retention Tax Credit (ERTC) Calculated?

ERTC Calculation for 2020

• The 2020 credit is calculated at 50% of qualified wages paid, up to $10,000 in pay and healthcare for each eligible employee for the year.
• In 2020, a maximum credit of $5,000 per eligible employee was offered annually.
• The credit is available for all employees receiving salaries in 2020 for qualified firms with at most 100 typical full-time employees in 2019.

ERTC Calculation for 2021

• To qualify for the credit for 2021, a qualified wage must have been paid at a rate of 70% of that wage, up to a maximum of $10,000 in pay and healthcare per eligible employee per quarter.
• For 2021, the credit limit per qualifying employee is $7,000 per quarter.
• For the first three quarters of 2021, each employee is eligible for a full credit of $21,000.
• The credit is available for all employees receiving salaries in 2021 for Eligible Employers with less than 500 typical full-time employees in 2019.

ERC Filing Deadlines

The filing deadline for the Employee Retention Credit (ERC) will depend on when the qualified wages are paid. An eligible employer can claim the tax refund on their quarterly federal employment tax returns. Specifically, the IRS Form 941, Employer's Quarterly Federal Tax Return, is used to claim the ERC.

For wages paid in 2020, the original filing deadlines have already passed. However, the IRS has provided extensions and revisions for claiming the ERC because of the COVID-19 pandemic's ongoing effects. Employers can retroactively claim the ERC for 2020 by amending their Form 941 for the respective quarters.

As for 2021, the deadlines are as follows:

• Q1 2021 (January to March) - Deadline: April 30, 2021
• Q2 2021 (April to June) - Deadline: August 2, 2021
• Q3 2021 (July to September) - Deadline: November 1, 2021
• Q4 2021 (October to December) - Deadline: January 31, 2022

Suppose you are unable to meet these deadlines. Your business can request an extension by completing Form 7004, Application for Automatic Extension of Time To File Certain Business Income Tax, Information, and Other Returns. Also, for employers who discovered that their business qualifies for more ERC than initially claimed tax incentives, they can amend previously filed 941 forms.

Late filing or payment may attract penalties, so keeping track of these deadlines is essential. Consult with your ERC Lawyer to ensure proper and timely filing.

Documents Required for Filing ERC Claims

Successfully filing an Employee Retention Credit claim requires the assembly of several crucial documents. These include:

Payroll Records

A comprehensive record of all payroll transactions during the claim period is essential. It will help to determine the amount of qualified wages paid to employees, which is a critical factor in calculating the ERTC.

Tax Documents

Tax documents such as previous years' tax returns, W-2s, and 1099 forms are necessary. These documents are required to provide a comprehensive overview of your business's tax situation and its eligibility for the credit.

Detailed Employee Information

Information such as employee hours, job descriptions, and wages will be required. This data will help verify the employees' eligibility and the accuracy of the claimed salaries.

Records of Government Orders

For businesses claiming the credit due to a full or partial suspension of operations, it is necessary to provide records of the specific government order that caused the disruption. This could include local, state, or federal mandates related to COVID-19.

Financial Statements

Financial statements showcasing a significant decline in gross receipts are crucial for businesses claiming credit under this eligibility criterion. Comparisons between quarters in 2019 and the corresponding quarter in 2020 or 2021 will be necessary.

Documentation of Healthcare Costs

Remember that the ERTC covers a portion of the cost of providing health care benefits. Therefore, supporting documents showing these costs, including invoices or payment records, will be required.

Assembling these documents before filing can make the process smoother and faster. Always consult your ERC lawyer to ensure all necessary documentation is prepared correctly and submitted on time.

Applying for ERC Tax Credit with an Existing PPP Loan

Even if you already have a Paycheck Protection Program (PPP) loan, your business can apply for Employee Retention Credit (ERC). In the early stages of the pandemic, businesses could not take advantage of both PPP and ERC simultaneously. This restriction was lifted by the Consolidated Appropriations Act, which was passed in December 2020.

Now, businesses can benefit from both programs, but there is a crucial condition: the same wages cannot be used for both PPP loan forgiveness and the ERC. In other words, if you have used certain wages to seek forgiveness for your PPP loan, those wages cannot be used to claim the ERC and vice versa. Keeping track of these wages is crucial to guarantee compliance and avoid any potential IRS concerns.

It's also important to note that if you received a PPP loan in 2020 and didn't claim the ERC, you can now go back and amend your 2020 payroll tax returns to claim the credit. However, as noted above, you can only claim the ERC tax credit for eligible wages not counted toward PPP forgiveness.

Therefore, carefully planning and coordinating these two programs can maximize your benefits while complying with the law. Given the complex interplay between the PPP and the ERC, it is advisable to work with ERTC Express as it understands the nuances of these programs and has helped more than 40 thousand businesses claim their tax credit.