The employee retention credit under the CARES Act encourages companies to keep employees on their payroll. Small employers receive improved benefits under the ERC regime. Specifically, for as long as they are an eligible employer, they may include wages paid to all employees. Large employers can only include salaries paid to employees for not providing services.
Technically, yes, but only salaries that meet the requirements are paid while the mandates are in effect and have a more than nominal impact on the company. Instead, the employer must reduce wage deductions on their income tax return for the tax year in which they are an eligible employer for the purposes of the ERC. The employee retention credit is a fully refundable tax credit that eligible employers request against certain employment taxes. It's not a loan and it doesn't have to be repaid.
For most taxpayers, the refundable credit exceeds the payroll taxes paid during a credit-building period. While an employer cannot include wages financed with a PPP loan in the ERC calculation, PPP funds only apply to eight or ten weeks of wage expenses. ERC eligibility periods are longer. PPP loans can also finance non-wage expenses.
No, but, if possible, assign the maximum allowable non-wage costs available to the PPP that is being forgiven. It is likely that the fund's sister and sister holding companies may be treated as separate operations or businesses when considering the status of eligible employers, since the Fund Owner of the Portfolio Companies is not an active activity or enterprise (rather a passive investment vehicle). Cherry Bekaert LLP and Cherry Bekaert Advisory LLC practice in an alternative practice structure in accordance with the AICPA Code of Professional Conduct and applicable laws, regulations and professional standards. .
Cherry Bekaert Advisory LLC and its subsidiary entities are not licensed CPA firms. The entities that belong to the Cherry Bekaert brand are independently owned and are not responsible for the services provided by any other entity that provides services under the Cherry Bekaert brand. Our use of the terms “our company” and “we” and terms of similar importance indicate the alternative practice structure of Cherry Bekaert LLP and Cherry Bekaert Advisory LLC. The ERTC is a refundable credit that companies can apply for on qualified wages, including certain health insurance costs, that are paid to employees.
Due to the delay in the Internal Revenue Service (IRS), it usually takes six to nine months to receive the refund check from the ERC. There are only three IRS application processing centers serving the entire country, leading to long wait times for almost any tax credit application. That's why it's critical to have tax credit experts on your side who can quickly process your application. The sooner your 941-X is sent to the IRS, the sooner you can receive your refund check from the ERC.
For more information on the employee retention credit, visit the Cherry Bekaert ERC Counseling Center or contact Martin Karamon. Omega's ERC experts know exactly how to maximize the amount of your ERC reimbursement while remaining compliant with the law. If your company received Paycheck Protection Program (PPP) loans, those salaries will not be counted toward your ERC repayment. Due to changes in COVID-19 safety regulations and the increase in employee retention credit refund requests, the IRS is currently processing millions of unprocessed payroll tax returns.
They can file a Form 941X (adjusted quarterly employer federal tax return or refund request) up to three years after filing or two years after paying, whichever is later. You must have W-2 employees on your payroll in order to receive an ERC refund, and only those payroll expenses, including your employer's health care expenses, will qualify for a tax deduction. The repayment schedule for the employee retention credit is such that the IRS originally planned to grant a refund between six weeks and six months after an updated payroll report was submitted. The tax credit professionals at Omega Accounting Solutions can manage the entire ERC application process for you.
From now on, the only way to apply for the ERC is to file an amended Form 941X (quarterly federal payroll tax return) for quarters during which the company was an eligible employer. To apply for the credit for previous quarters, employers must file Form 941-X, Employer's Adjusted Quarterly Federal Tax Return or Refund Request, for the applicable quarters in which qualified wages were paid. .