A Guide for Orlando, FL Businesses on How to Apply for ERC
As businesses in Orlando continue to rebuild and recover from the challenges posed by the COVID-19 pandemic, it is vital for business owners to familiarize themselves with available government resources. Among these resources is the Employee Retention Tax Credit (ERTC).
ERTC, also called ERC, is a program designed to assist businesses that faced difficulties during the pandemic, yet managed to retain their employees. This article serves as an ERC guide for Florida businesses, offering insights on how to successfully apply for the Employee Retention Credit.
Understanding the Employee Retention Credit
The Employee Retention Tax Credit was originally created by the federal government under the CARES Act. Similar to the Payroll Protection Program (PPP), the ERC program was designed to provide relief for businesses that could have laid off employees, but chose not to.
While PPP was a forgivable loan for businesses, ERC is a tax credit based on wages that were paid to employees who were unable to work due to a significant decline in business activity or a partial or full suspension of operations. The rules for PPP require businesses to use the loan for specific purposes. However, the ERC tax credit can be used for any purpose.
Eligibility Criteria for the ERTC
To qualify for the Employee Retention Tax Credit, Orlando businesses must meet specific eligibility criteria. Businesses may be eligible even if they received a PPP loan. This chart provides detailed qualification criteria:
Applying for the ERTC
Orlando businesses can follow these essential steps to apply for and benefit from the Employee Retention Tax Credit:
- Consult with a tax professional: Because the ERC is very complex, it is recommended that all businesses seek guidance from an experienced ERC Specialist or accountant that understands the tax laws surrounding ERC.
- Assess eligibility and calculate the credit amount: Work with your tax professional to determine if your business meets the eligibility criteria and calculate the maximum credit amount based on qualified wages. The rules for calculating the credit may vary between 2020 and 2021, making professional assistance crucial.
- Complete Form 941: Accurately complete or modify Form 941, the Employer’s Quarterly Federal Tax Return, with the assistance of your tax professional. Provide the necessary information, including details about qualified wages and the number of eligible employees.
- Maintain thorough documentation: Keep comprehensive records that substantiate your eligibility for the ERTC. Retain payroll records, financial statements, and any relevant evidence of the decline in gross receipts or government-issued orders.
Conclusion
Similar to PPP, the Employee Retention Tax Credit is a valuable resource from the federal government for Orlando businesses striving to recover from the financial impacts of the COVID-19 pandemic.
Before applying for ERC, businesses must understand the eligibility criteria. If a business qualifies, they must follow the application process diligently. Because the program is complex, it’s best to consult with an ERC specialist or an accountant for accurate guidance to help ensure compliance.
With the Employee Retention Tax Credit, Orlando, Florida businesses can move closer to a brighter financial future. If you have additional questions about ERC you may find answers on our ERC FAQs. We’d also be happy to answer any questions directly. Call us at 919-609-2714.
As businesses in Orlando continue to rebuild and recover from the challenges posed by the COVID-19 pandemic, it is vital for business owners to familiarize themselves with available government resources. Among these resources is the Employee Retention Tax Credit (ERTC).
ERTC, also called ERC, is a program designed to assist businesses that faced difficulties during the pandemic, yet managed to retain their employees. This article serves as an ERC guide for Florida businesses, offering insights on how to successfully apply for the Employee Retention Credit.
Understanding the Employee Retention Credit
The Employee Retention Tax Credit was originally created by the federal government under the CARES Act. Similar to the Payroll Protection Program (PPP), the ERC program was designed to provide relief for businesses that could have laid off employees, but chose not to.
While PPP was a forgivable loan for businesses, ERC is a tax credit based on wages that were paid to employees who were unable to work due to a significant decline in business activity or a partial or full suspension of operations. The rules for PPP require businesses to use the loan for specific purposes. However, the ERC tax credit can be used for any purpose.
Eligibility Criteria for the ERTC
To qualify for the Employee Retention Tax Credit, Orlando businesses must meet specific eligibility criteria. Businesses may be eligible even if they received a PPP loan. This chart provides detailed qualification criteria:
Applying for the ERTC
Orlando businesses can follow these essential steps to apply for and benefit from the Employee Retention Tax Credit:
- Consult with a tax professional: Because the ERC is very complex, it is recommended that all businesses seek guidance from an experienced ERC Specialist or accountant that understands the tax laws surrounding ERC.
- Assess eligibility and calculate the credit amount: Work with your tax professional to determine if your business meets the eligibility criteria and calculate the maximum credit amount based on qualified wages. The rules for calculating the credit may vary between 2020 and 2021, making professional assistance crucial.
- Complete Form 941: Accurately complete or modify Form 941, the Employer’s Quarterly Federal Tax Return, with the assistance of your tax professional. Provide the necessary information, including details about qualified wages and the number of eligible employees.
- Maintain thorough documentation: Keep comprehensive records that substantiate your eligibility for the ERTC. Retain payroll records, financial statements, and any relevant evidence of the decline in gross receipts or government-issued orders.
Conclusion
Similar to PPP, the Employee Retention Tax Credit is a valuable resource from the federal government for Orlando businesses striving to recover from the financial impacts of the COVID-19 pandemic.
Before applying for ERC, businesses must understand the eligibility criteria. If a business qualifies, they must follow the application process diligently. Because the program is complex, it’s best to consult with an ERC specialist or an accountant for accurate guidance to help ensure compliance.
With the Employee Retention Tax Credit, Orlando, Florida businesses can move closer to a brighter financial future. If you have additional questions about ERC you may find answers on our ERC FAQs. We’d also be happy to answer any questions directly. Call us at 919-609-2714.
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