Can my business qualify?
Yes. Businesses with W2 employees are eligible for up to $26K per employee.
What documents are needed?
Payroll Report outlining all payments, deductions, contributions and taxes for each employee for each paycheck during your ERC eligibility period. Quarterly tax document. Form 941. Statement substantiating revenue reduction, supply chain issue or mandated business closure. Did you receive a PPP loan? Sign
Do I have to repay the ERC Credit?
No. This is not a loan. It’s a refundable tax credit. When we file your ERC claim we request a refund check for you.
Can’t I just have my CPA file? Why would I use Warburg Equities Tax Credits ?
Of course. The challenge is the ERC credit is taken on your payroll returns and not through your business income tax returns, which is what most CPA’s handle. Because of this most CPA’s don’t process this credit, unless they process your payroll in house. This is also a big reason why this credit is so underutilized. Since CPA’s don’t typically handle it and they are the tax experts, it has mostly fallen in a middle ground where few are able to effectively process the credit. Interestingly, we receive a large portion of our clients from CPA’s. At Warburg Equities Tax Credits we have decades of payroll experience along with licensed CPA and Tax Attorneys that work with us, which has allowed us to specifically focus to understanding and maximizing the ERC program. In our experience we have found that due to the complexity (the ERC tax code is over 200 pages) and time investment necessary to understand the ERC program, very few are able to effectively maximize this sizeable credit for your business.
Will the ERC funds run out?
This is not a lending program – tax refunds are issued by the US Treasury. Therefore, all eligible employers will receive the funds.
Is the ERC Credit taxable?
The ERC credit is not considered income for federal income tax purposes, but you must reduce any deductible wage expenses by the amount of the credit. Please provide the credit information to your CPA for tax purposes.
Can I get ERC Funds if I already took the PPP?
Yes. The Taxpayer Certainty and Disaster Tax Relief Act of 2020, enacted December 27, 2020, modified the ERC credit rules. One of the modifications included allowing a company to have a PPP loan and still take advantage of the ERC credit. However, you can’t use the same dollar for dollar funds. We take this into account when processing your ERC credit.
How long does it take to get my ERC Credit?
This is how the process works: you send us the required documents and we process an analysis. The process from start to finish usually happens in 2-3 weeks. If you wish to move forward, you will select your desired payment option and we file your claim. Once filed, refunds are released based on IRS backlog. Currently, the IRS has stipulated a 20 week minimum turnaround on the ERC refunds but in our experience we are seeing six to 9 months on average.
As an owner do my wages, or the wages of any family member I employ qualify?
Maybe. Wages of owners who have majority ownership, defined as over 50%, do not qualify, nor do the W2 wages of any immediate family members of the owner. In the case an owner has less than 50% ownership, their W2 wages qualify, as do the W2 wages paid to immediate family members.
My revenue went up in 2020, can I still qualify for the ERC program?
Yes! There are two possible qualifications for 2020: revenue reduction, or a “full or partial shutdown of your business due to COVID-19”. Specifically, the IRS describes this as “A government authority required partial or full shutdown of your business during 2020 or 2021. This includes your operations being limited by commerce, inability to travel or restrictions of group meetings.” Below are several examples of qualifying events: Example 1: A restaurant must close or limit its on-site dining. Such as having to close down every other table, due to COVID-19 restrictions. Example 2: A business that needs to meet with clients in person and has to cancel meetings due to COVID-19 restrictions. Example 3: A business has to reduce their operating hours because COVID-19 restrictions and cleaning requirements Example 4: A business had delayed production timelines caused by supply chain disruptions. Example 5: A business with a planned event has to cancel that event, or restrict the amount of people who can attend due to COVID-19 restrictions. Please contact your agent for specifics.
Can I qualify for the ERC if I’m self employed?
No, if you are majority owner (over 50%) of your company then your wages do not qualify.
I’m getting more in ERC Credit than I paid in taxes?
Remember that this program is taken according to payroll taxes paid, not on income taxes. ERC funds not applied towards owed payroll taxes are treated as an ‘overdeposit’ of taxes that will be requested as a refund check from the IRS.