FAQs for Employee Retention Tax Credit (ERTC) for Qualified Startup Recovery Businesses.  Don’t need the FAQs, just want to apply, scroll down. 

What is the Employee Retention Tax Credit (ERTC)?

The ERTC is a refundable tax credit designed to encourage businesses to keep employees on payroll during challenging periods. It was introduced as part of the CARES Act and extended through subsequent legislation.

What is a Qualified Startup Recovery Business?

A Qualified Startup Recovery Business is a business that:

  1. Began operations after February 15, 2020.
  2. Has average annual gross receipts of less than $1 million in the preceding three years.
  3. Is eligible for up to $50,000 per quarter in ERTC, even without a significant decline in revenue or suspension of operations.

How much can I claim as a Qualified Startup Recovery Business?

Eligible businesses can claim up to $50,000 per quarter in refundable tax credits for wages paid from July 1, 2021, through December 31, 2021.

What wages are eligible for the credit?

Qualified wages include wages and compensation paid to employees, including certain health plan expenses, up to a maximum of $10,000 per employee per quarter.

Do I need to prove a revenue decline to qualify?

No, Qualified Startup Recovery Businesses do not need to demonstrate a revenue decline or operational suspension to qualify for the credit.

What documents are needed to claim the credit?

You’ll need payroll records, employee details, and tax filings (e.g., Form 941). Our firm can guide you through the process to ensure compliance and maximize your claim.

This sounds great.  I believe that I qualify.  How do we get this process started?

Please fill out the intake form to begin the application process.  No obligations and no cost to you.  

 

Timeline and Fees?
Once you submit the intake form, we will follow up with you within 48 hours to begin the process of onboarding you. No out of pocket fees to work with and submit the ERTC refund application. Our fee is a flat 10% fee of the actual refund received from the IRS.

When should I expect to receive the refund?
IRS is taking a long time to process these. The IRS is currently offering guidance of 4 to 12 months on processing time for the ERTC refunds.

Sounds too good to be true?

Here’s some links to direct IRS citations:  

  1. IRS Overview on Employer Retention Tax Credit:  Original debut under CARES Act.
  2. IRS FAQs on the Employer Retention Tax Credit:  Recovery Start Up Business. 
  3. Internal Revenue Bulletin: 2021-34:  Notice 2021-49 provides guidance on the employee retention credit provided under section 3134 of the Internal Revenue Code (the Code), as added by section 9651 of the American Rescue Plan Act (ARP), applicable to qualified wages paid after June 30, 2021, and before January 1, 2022.  
  4. IRS FAQs Deadline to Apply:  Q2. Is there a deadline to claim the ERC? (added July 27, 2023) A2. Generally, for 2020 tax periods, the deadline is April 15, 2024. For 2021 tax periods, the deadline is April 15, 2025. 

Internal Revenue Bulletin: 2021-34:  Same link above.  Part III, Section D.  Definition of Recovery Start Up Business.  Section 3134(c)(5) of the Code defines a “recovery startup business” as an employer (i) that began carrying on any trade or business after February 15, 2020, (ii) for which the average annual gross receipts of the employer (as determined under rules similar to the rules under section 448(c)(3) of the Code) for the 3-taxable-year period ending with the taxable year that precedes the calendar quarter for which the credit is determined does not exceed $1,000,000, and (iii) that is not otherwise an eligible employer due to a full or partial suspension of operations or a decline in gross receipts. Section 3134(b)(1)(B) provides that in the case of an eligible employer that is a recovery startup business, the amount of the credit allowed under subsection 3134(a) (after application of the limit under subsection 3134(b)(1)(A)) for each of the third and fourth calendar quarters of 2021 cannot exceed $50,000.