Employee Retention Credit (ERC)

Congress created the Employee Retention Credit (ERC) to help provide relief for businesses that the Pandemic impacted.

Scioto Mile – Columbus

What is the ERC?

The Employee Retention Credit (ERC) is a tax credit that was created as part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act, which was enacted in response to the economic impact of the COVID-19 pandemic.

Potential Benefit to Your Business:

2020 ERC

$ 0

per employee for the entire year

2021 ERC

$ 0

per employee per quarter

Our Process

The team at Royse Partners not only specializes in completing ERC studies for our clients, but we have also strategically created a process that minimizes the time investment and maximizes returns. Our process is simple and effective:

Step 1

Consultation

This initial consultation comes at no cost to our clients and helps ensure that your business is a viable candidate for the program. Our goal is to bring on businesses that have a high chance of qualification, saving you valuable time and effort.

Step 1

Step 2

Discovery Call

If the ERC is a good fit for your business, we'll schedule a discovery call to provide a brief overview of the process and understand your business's experience during the pandemic. This information will be used to establish qualification criteria and set the stage for the rest of the study. We'll also discuss the documentation needed to evaluate your business’s qualification and credit calculation.

Step 2

Step 3

Qualification

Once qualification has been identified, we will ask for the second round of documents to begin quantifying the value of the ERC. During this step, we will work together with your business to ensure that all the nuances of the program are considered. Next, the study will go through three layers of review, the assigned project manager, a senior team member, and an assessment from our in-house legal team.

Step 3

Step 4

Delivery

Once your study has been approved for release, you will receive a credit letter, including a memorandum outlining the study’s qualification and quantification. Your business will then have to amend its quarterly Form 941s (941-X) either by one of our partner firms, or your corporate CPA. Once completed, the amended documents will be mailed to the business for signature and subsequent filing with the IRS.

Step 4

Step 5

Substantiation

The last deliverable will be the completed substantiation report that outlines the entirety of the study along with the documents required by the IRS for all taxpayers that claim the ERC. This document will remain on file throughout the statute of limitations (3-5 years*) in the event of an IRS review. We align ourselves with our clients by providing audit defense contracted through outside tax professionals to ensure your business remains in the best possible tax position during this time.

Step 5

* 3 years for Quarters 1-4 of 2020 and 1-2 of 2021 | 5 years for Quarter 3 of 2021

Common Questions

Congress introduced the ERC through the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) in March of 2020 and subsequently bolstered the program through the Consolidated Appropriations Act (CAA), and the American Rescue Plan Act (ARP).

Congress created the Employee Retention Credit (ERC) to help provide relief for businesses that the Pandemic impacted.

Unlike PPP, the ERC is not a loan, and funds can be used for any purpose. Companies can qualify for tax years 2020 and 2021 based on stress tests focused on revenue decline, operational impacts from government mandates, or startup business status.

Taxpayers could qualify in seven eligible quarters, with a maximum benefit of $26,000 per employee.

While certain businesses may have a better chance of qualification than others, businesses of all sizes and industries can potentially qualify for the ERC. If qualification is obtained, your business could be eligible for a maximum benefit of up to $26,000 per employee on staff during the pandemic. Generally speaking, this amount of benefit may be reduced by multiple factors, such as claiming other federally sponsored programs, payroll size, and the number of qualifying quarters.

Businesses as well as nonprofit organizations can potentially qualify in three distinct ways:

A significant decline in gross receipts during the calendar quarters of 2020 and 2021 (when compared to 2019)
A more than nominal impact to their operations due to a government mandate or order during the calendar quarters of 2020 and 2021
Starting a business on or after February 15th, 2020

Have more questions? Check out our FAQs

How can my business qualify for the ERC?