Question 1

Can I qualify if I’m a 1099 contractor?

Accepted Answer

Unfortunately, no. This program is only for companies who paid W2 wages to non-owners.

Question 2

Can I qualify if I don’t have any W2 employees?

Accepted Answer

Unfortunately, no. This program is only for companies who paid W2 wages to non-owners.

Question 3

Can I qualify for ERC when I got a PPP loan?

Accepted Answer

Yes! There are multiple quarters you can qualify for, even if you got a PPP loan. Unfortunately, you can’t use the same covered time period that you used for PPP, which might reduce your ERC amount, but you can most definitely qualify for ERC.

Question 4

What if my revenue went up in 2020 or 2021? Can I still qualify?

Accepted Answer

Yes! It’s called the “Employee Retention” credit, not the “Revenue Reduction” credit. It’s intended to help out the businesses that kept people employed during the hard times of the pandemic, so you can qualify even if your revenue went up. You’ll need to qualify using one of the other qualification checks though – shutdowns/mandates or supply chain disruption.

Question 5

How long is the ERC program open for?

Accepted Answer

For most businesses, this will be open into 2024 (unless they change the rules again). It’s open as long as you can file amended 941-X returns, which is the later of 3 years from the date you filed your original return, or 2 years from the date you paid the payroll tax.

Question 6

What if I have bad credit? Is there a credit check involved?

Accepted Answer

It doesn’t matter because this is not a loan – it’s a tax credit. There are no credit checks, collateral, or personal guarantees required.

Question 7

Can I qualify for ERC if my business is now closed?

Accepted Answer

Yes, there is a possibility. It depends on when the business closed.

Question 8

What documents do I need to send you?

Accepted Answer

To complete your tax credit, we’ll work with you and your CPA to get the following documents: Payroll Journals outlining all payments, deductions, contributions, and taxes for each employee for each paycheck during your ERC eligibility period, Filed 941, 943, or 944 payroll reports, Profit and Loss Statements (P&Ls) for 2020 and 2021, Tax returns for 2020 and 2021, PPP Loan Forgiveness Application (if applicable).

Question 9

Do I need to repay the tax credit?

Accepted Answer

Nope! There is nothing to repay with a tax credit. This is not a loan.

Question 10

How long does it take to get my credit?

Accepted Answer

We are generally telling clients between 5-14 months. We take a few weeks to do the work, and the IRS is variable in how long it’s taking to process, but we’re seeing in the 5-14 month range.

Question 11

When will the ERC funds run out?

Accepted Answer

There is no limit on the funds to this program. Some estimate the government may pay nearly $1 trillion.

Question 12

What if I have back taxes on my account with the IRS?

Accepted Answer

If you owe back taxes on your account, the IRS will deduct the amount you owe in back taxes from the credit amount, and will pay you the difference.

Question 13

Is the ERC credit taxable?

Accepted Answer

The ERC credit is not actually considered taxable income for federal tax purposes. But what it might do is reduce your company’s deductible wage expenses by the tax credit amount, which will most likely increase your net profit, and therefore what you pay taxes on. Please provide the credit to your CPA or tax preparer for what to do.

Question 14

Will I get in trouble with the IRS for filing?

Accepted Answer

Absolutely not! The IRS created this program and doubled-down on making it easier and more lucrative for businesses, so they really want you to file and use it.

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