If you started a business during the Covid Pandemic (after Feb 15, 2020) you are braver than most. As many were struggling to stay afloat, you decided to take hold of the new world that was in front of you. Although brave, you have probably been envious lately as you have seen all the businesses that were open before the pandemic receiving their ERC funds.
The good new is you do not have to be disappointed any longer. If you have not heard yet, there is a way for you to receive ERC funds, too.
As you probably know, since the passing of the CARES Act in March 2020, the Employee Retention Credit (ERC) has provided a much-needed lifeline for many businesses affected by the pandemic. Eligible businesses that experienced reduced sales in 2020 and 2021 compared to 2019 can receive up to $7,000 per employee per quarter depending on when their reduction occurred. The ERC was amended shortly after it was first enacted, and further changes were made with the signing of the Infrastructure Investment and Jobs Act (Infrastructure Bill).
Based on the amended CARES ACT in 2021, Businesses that opened during the pandemic may also qualify to receive up to $100,000 in tax refunds from the IRS this year. To be eligible for the Employee Retention Credit, your business must have started operations after February 15th, 2020 and have an average annual gross receipt of no more than $1 million. If you meet these criteria, then you could benefit and receive ERC.
The Recovery Startup Business can receive a credit of up to 70% of eligible wages for qualified employees, maxing out at $7,000 per employee per quarter. The amount of the credit is calculated in the same way as other businesses that qualify under the reduction of sales. However, the total amount of this credit cannot exceed $50,000 per quarter.
With that being said, if your business has over 7 or 8 employees you will probably meet the max limit. You do not need to worry about the reduction of sales qualification because you were obviously not in business the years prior to be able to compare such. The calculations are just done as if you had reduction of sales.
The exact amount you receive will be based on the number of employees, the wages paid and some other factors. With that being said, it is best to speak to an ERC Specialist. If you have one employee or more that is not yourself or family and you started your business after Feb 15, 2020, it is time to celebrate as you most likely are eligible for the recovery startup .
Congratulations!!!
