In the year 2021, when the pandemic struck the entire world, employee retention credit or ERC was playing a vital role in giving employers 70% credit. This amount has gone through a hike since the last year (2020) and allows up to $10,000 of the qualified wage per quarter of the employee.
Apart from this increase, the ERC also offers several benefits to small business firms. If you are the owner of a business firm but you’re not familiar with what ERC is, click here to learn more. We will also help you with the steps to take to claim ERC.
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Assemble the details of your business
The employee retention credit or the ERC is available for all businesses in the US but all businesses don’t qualify. This clearly implies that you have to work with your CPA or accountant to determine whether or not your business can seek the help of employee benefits. When we say business details, we mean the legal name of the business, address and other information, and the total number of employees.
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Collect details on payroll
The next step to take is to gather details on the payroll. You have to determine the employees who will qualify for this pandemic tax credit, the wages drawn by the employees, and the gross pay of the employees in each quarter of 2020 and 2021. In case there is an employee who has stopped working, make sure you know when he stopped working.
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Gather documents of any PPP loan
Next, it is vital to gather details on PPP loans. You have to include the date on which the PPP loan was issued and the total amount of the PPP loan. When you use the documents of your PPP loans, you will be able to determine whether or not you will qualify for ERCs. On the contrary, if you’re someone who hasn’t had a PPP loan, then this is not applicable to you.
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Get to know full-time employee detail from 2019
You also need to gather all details of the full-time employees who were employed in the year 2019. Get their names, addresses, and job locations. Also, try to know the start date and end date of the person’s employment with your business.
Therefore, if you’re someone who is running a business, you should know about the intricate details of the ERC and how it can help businesses save their dollars.