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Which Small Businesses Are Now Eligible to Apply For the ERC (Employee Retention Credit)?

May 16, 2022 10:45:00 AM / by CSI Accounting Staff posted in small business taxes, small business payroll, small business accounting, how to

The ERC is a great COVID relief effort, so why aren't there more eligible small businesses applying? Long story short, the media was distracted by the initial excitement of other COVID relief efforts. Now that the stimulus checks and PPP loans seem to be through, where's the excitement for the Employee Retention Credit?

Although this benefit was cut on September 30, 2021, you may still be eligible to claim credits from 2020 to Q4 2021.

Perhaps one of the most important things mentioned in this article is how CSI Accounting & Payroll has helped ERC applicants in the past (and can help you as well!) - no hassles, no worries. We've worked with thousands of small businesses in our more than 50 years in operation, so we're familiar with various application processes and know how to regularly check for updates on benefits just like this one.

In this article, we also discuss:

  • What is the ERC?
  • How has the ERC expanded?
  • Are you eligible for the ERC?

Small business owner crossing fingers looking excited at laptop computer to see if she is eligible for the ERC

Many Eligible Businesses, Few Applicants

Why are so many eligible businesses not taking advantage of this incredible deal?

Do they not know that they may still be eligible to claim credits from 2020 to Q4 2021? Do they not know that they can earn up to a $100,000 tax refund that does not need to be repaid? Do they not know that CSI Accounting & Payroll can walk them through the process? We've already helped many of our clients get large sums of COVID relief money. We make it easy!

How much money has CSI Accounting & Payroll gotten for our clients?

We've already helped our clients obtain critical COVID relief funds - over $10 million in total!
  • PPP loan 1 provided our clients who applied with over $6 million.
  • PPP loan 2 brought in over $3 million.
  • The ERC has hit over $1 million.
Why are the ERC obtained funds so much lower than both rounds of PPP loans? There's a lack of applicants!
 
How has the ERC changed?
 

When COVID relief efforts first began, the ERC slipped under the radar due to the media's focus on stimulus checks and PPP loans. Similar to PPP loans, the ERC incentivizes businesses to keep employees on payroll, but unlike PPP loans, it does not need to be repaid.

From the start, we have discussed how the government has continually increased the ERC's outreach and benefits. A while back, the ERC had expanded eligibility to include Recovery Startup Businesses. New businesses (started on or after February 15th, 2020) could earn up to a $100,000 tax refund.

Now, as of September 30, 2021, the maximum tax credit available per employee is $21,000 - unless you are a Recovery Startup Business. If so, you may also be eligible for Q4 2021 credits.

SMALL BUSINESS PROFITABILITY CHECKLIST

So... do you qualify for the ERC?

To get an idea of if you may be eligible for the ERC, check out the following criteria.

2020 ERC Eligibility

  • You were in business before February 16, 2020.
  • You have 500 or fewer W-2 employees.
  • A quarter in 2020 has sales down by at least 50% of the corresponding quarter's in 2019 OR your business was subject to a full or partial shutdown order in this quarter, and you paid out wages to your employees while it was shut down.

Q1 & Q2 2021 ERC Eligibility

  • You were in business before February 16, 2020.
  • You have 500 or fewer W-2 employees.
  • Q1 and/or Q2 2021 sales are less than 80% of the corresponding quarter's in 2019 OR your business was subject to a full or partial shutdown order in this quarter, and you paid out wages to your employees while it was shut down.

Q3 2021 ERC Eligibility

  • You have 500 or fewer W-2 employees.
  • You were in business before February 16, 2020 OR you have under $1 million in sales.
  • Q1 and/or Q2 2021 have sales down by at least 90% of the corresponding quarter's in 2019 OR Q1 and/or Q2 2021 sales are less than 80% of the corresponding quarter's in 2019 OR your business was subject to a full or partial shutdown order in this quarter, and you paid out wages to your employees while it was shut down.

Q4 2021 ERC Eligibility

  • You have 500 or fewer W-2 employees.
  • You were not in business before February 16, 2020.
  • You have under $1 million in sales.

Ready to learn more?

At CSI Accounting & Payroll, we stay on top of the changes in COVID relief efforts in order to help our clients through this difficult time. Relief money means anything from recovering from a financial loss to helping your business keep its doors open!

Even after the ERC has come to a close, we are dedicated to helping eligible small businesses claim their credits for previous quarters.

Not to mention, coming on board as a monthly accounting client has tons of benefits over just annual tax accounting or even hiring an in-house accountant. To learn more, click the button below for a free consultation. Let's examine your situation to see if we can be a good fit for each other!

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CSI Accounting Staff

Written by CSI Accounting Staff

This article was composed by a member of our staff who interviewed our experts to get the facts straight. Any uncited information found here came straight from a knowledgeable accountant or payroll specialist.

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