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The Employee Retention Credit

Many businesses struggled to stay afloat during COVID-19. As we begin to find normalcy again, business owners like yourself face the task of recovering and building back the economy. The Employee Retention Credit is a generous government program that helps ease this process.

The ERC is a stimulus program designed to support businesses that kept on employees during the pandemic. We help businesses determine if they qualify and help them through the process. Details of the program include:

Up to $26,000 per employee

Refundable tax credit

All Quarters In 2020 & Quarters 1-3 In 2021

Available even if you received a PPP Loan

Small Business Owner

Our Process

Exploratory Call

We like to have a call with all of our clients so that we can properly explain the credit to them. It is important to us that each client understand the qualifications of the credit so they make sure they fit the bill before spending more time on it. 

Some firms prefer to have a 5-minute questionnaire on their website to determine qualification. We find that these tend to be misleading and don't disclose the full potential risks of claiming this credit.

Scheduling a 20-minute call with us will help us understand your specific circumstances, allow you to ask questions, and give you a personal contact with someone at Red Sand.

Document Collection

If the ERC makes sense for you, then we will assist in gathering the documents necessary for filing. This step usually takes less than an hour of your time. 

Analysis

Once we have the documents needed, we will complete the analysis and determine exactly how much money is on the table for your business.

Audit Preparation

Once we know how much you can claim, we will have one final call to explain the numbers and help prepare documentation in case of any potential audits. Although there have been very few ERC audits, we believe it is best practice to treat each case as if it were going to be audited with certainty. That way, you can best mitigate your risk and feel comfortable moving forward with filing.

Qualifications

When dealing with the ERC, there are typically two ways to qualify. Meeting one or the other qualifies you to claim.

Gross Receipts

If a quarter in 2020 dipped 50% or more compared to the same quarter in 2019.

If a quarter in 2021 dipped 20% or more compared to the same quarter in 2019.

Full/Partial Operational Shutdown

If your business had to comply with COVID-19 government mandates that limited your ability to deliver goods and services.

We specialize in helping businesses substantiate their disruptions and measure up to the credit qualifications.

Ready to get started?

Frequently Asked Questions

Am I too late to file?

I didn't have a decline in sales.

What if I got a PPP Loan?

No, currently the limitation for filing isn't set to expire until later in 2023/2024. This is always subject to the legislative risk of early stoppage.

The safe harbor test for qualification is a significant decline in sales. If that's not you, we simply need to document how government orders related to COVID-19 held up your business during 2020 or 2021.

The rules that didn't allow you to claim the ERC and the PPP were amended retroactively in December of 2020. Now businesses are able to receive both.

Do I have to repay this?

What about 1099 contractors?

Will I be audited?

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.

Because this is a payroll tax credit, 1099 wages can't be applied to the calculation. Only businesses with W2 employees can claim the ERC.

It is unknown how many audits there will be and how stringent the IRS will be with them. We find that it is best to treat each case as if it were going to be audited with certainty. 

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