Eligible Employers for the purposes of the Employee Retention Credit are those that carry on a trade or business during calendar years 2020 & 2021 (including a tax-exempt organization) that either:

1. Fully or partially* suspended operations by a governmental order (AND/OR)

2. Experienced a significant decline in gross receipts during a calendar quarter

*It is absolutely critical to get specialized advice about this. (And possibly even a 2nd opinion). An organization can be considered "partially suspended" if a state/local mandate imposed restrictions by limiting commerce, travel, or meetings (for social, commercial, religious, or other purposes). This can be a "Stay at Home" order, limited indoor/on-site access, limited/canceled in-person meetings and other capacity restrictions, reduced operating hours, delayed production timelines due to supply chain issues, or several other possibilities you should consider and seek personal advice on.

The ERC was not widely used until March 2021, when updated IRS regulations made this type of COVID-19 Relief more accessible. In short: thousands of businesses who once had to "choose" between the Paycheck Protection Program (PPP) and ERC can now qualify for both by amending their Quarterly 941s.

It's critically important to realize the legislation for this program has changed FIVE times in the past year, and still has many pending changes that are currently being voted on (at the time of writing).

Want more information? Just read Notice 2021-20 on the official IRS FAQ website. Refunds are currently being processed daily by tax credit professionals. That said, the IRS backlog is starting to increase as well, so time is of the essence to find out if your business qualifies for this refund ASAP.

As with most things in business, tax credits often require specialized knowledge and experience. Considering the legislation on ERC has already changed several times, it's understandable that many payroll firms, CPAs, and tax advisors may not want to risk their license (or don't have time) to advise on and calculate an audit-ready refund check for a once-in-a-pandemic incentive program like the ERC.

It's important to fully document all processes and procedures, organize records properly, and ideally avoid an IRS audit. The ERC has complex calculating requirements such as Controlled Group criteria, documenting qualification methodology, coordination with PPP loans, allocating healthcare expenses to the appropriate time periods, etc. Hiring specialists can help reduce "audit stress" while also not worrying about leaving a ton of money on the table.