Employee Retention Tax Credit: Deadlines, Eligibility, And What To Know

The Employee Retention Tax Credit (ERTC), also referred to as the Employee Retention Credit (ERC), was introduced by the federal government at the height of the COVID-19 pandemic. This credit primarily aims to facilitate employee retention for businesses and provide financial support, offering potential benefits of up to $26,000 per W2 employee. The credit has undergone multiple updates since its inception, broadening eligibility and allowing a wider range of companies to apply and qualify including cannabis. 

Why Would The Government Provide This Refund?

The provision of the Employee Retention Tax Credit (ERTC) refund by the government serves as a strategic measure to incentivize businesses to retain their workforce amidst challenges. By offering financial relief, this initiative aims to: 

• Preserving Jobs: ERTC helps businesses keep their employees, ensuring stability in their operations.
• Economic Continuity: By retaining staff, businesses can continue providing products and services, contributing to overall economic stability.
• Mitigating Disruptions: ERTC minimizes workforce disruptions, allowing companies to swiftly resume full operations.
• Community Support: The initiative aids in sustaining local economies by preventing widespread job losses.

Which ends up being a win-win scenario for everyone. 

Who Can Receive The Employee Retention Credit?

Recognizing that numerous businesses and non-profit organizations severely affected by the pandemic didn't meet the initial ERTC qualifications, legislation was enacted to expand the program's scope, enabling a larger number of small businesses to access the tax credit. This adjustment increased the eligibility of enterprises for the credit.

Advantages Of Working With Paragon Prime Group

With a nearly 100% success rate in obtaining Employee Retention Credits (ERC) for its diverse client base, Paragon Prime Group (PPG) has solidified its reputation as a reliable and expert resource for navigating the intricacies of tax credits and IRS regulations. 

1. Expertise in IRS Funds

PPG boasts a team of 16 Certified CPAs who specialize in IRS funds, ensuring that each client receives top-tier expertise for their ERC claims.

2. Database Notifications

PPG's advanced database system proactively alerts clients to other qualifying funds, thus expanding the financial opportunities available to them.

3. Legal Defense

Should a client face an IRS audit in relation to ERC, PPG's team of seasoned lawyers will step in for defense and representation.

4. Maximized Tax Benefits

PPG ensures that each client is claiming the maximum eligible refund, fully optimizing available tax benefits.

5. Compliance Assurance

By staying up-to-date with the latest regulations and requirements, PPG guarantees that every application submitted is compliant with current laws.

6. Honesty and Transparency

Transparency and honesty are cornerstones of PPG's corporate culture. The firm is committed to providing clear and accurate information throughout each phase of the ERC application process.

ERC Qualifications

Due to the American Recovery and Reinvestment Act. Recent updates, including the Consolidated Appropriations Act, now enable the initial group of Paycheck Protection Program (PPP) borrowers previously ineligible for the Employee Retention Credit (ERC) to claim it.

To qualify for this credit during the intended quarter of usage, your business should fulfill one of the following conditions:

• Operational Disruption:
  • If your business had to cease, modify or reduce operations significantly due to a government order.
• Gross Receipts Decline:
  • If your business experienced a significant decline in gross receipts.
• Startup Business Recovery:
  • Qualify as a Recovery Startup if you began your enterprise after February 15, 2020, and have yearly gross receipts below one million dollars.

What Wages Are Eligible For The ERC?

Both salary and other forms of compensation that are subject to FICA taxes, as well as certain medical expenses, can be deducted in order to qualify for the employment retention tax credit. The eligible refund quarters span from the second quarter of 2020 through the third quarter of 2021.(December 31, 2021, for Recovery Startup Businesses). 

What Does It Mean To Be Suspended Entirely Or Partially?

The specific circumstances surrounding your business or organization will determine whether or not it was forced to close its doors. The following is a list of some examples of people who still need to meet the requirements.

• If you could grant all of your employees the option to work from home during the outbreak, business likely continued.
• You were not placed on indefinite suspension if a stay-at-home order had an effect on your consumers but did not interfere with the operation of your business in any manner.
• If you voluntarily shut down your company or reduced the number of hours it was open, you were exempt from the requirement that you go on suspension.
• Suppose a government order forced you to temporarily suspend operations at your company, which must be temporarily halted. In that case, your company may still be eligible for ERC if your total sales have fallen.

What Impacts Can Qualify Your Business Or Organization?

Here are some impacts that can qualify your business or organization:

• Full shutdowns
• Decline in revenue compared to the same quarter in 2019
• Partial Shutdowns
• Interrupted operations
• Supply chain interruptions
• Limited capacity to operate
• Shifting hours to increase the sanitation of your facility

 
Which Types Of Organizations Are Eligible To Apply For ERC?

The following are the types of entities that can potentially qualify for the ERC:

• Cannabis
• Medical Facility 
• Restaurant
• Warehouse
• Auto Repair
• Shop
• Bar
• Car Wash
• Gym
• Hotel
• Private School
• Church 
• Retail
• Senior Center 
• Manufacturing
• Solar Company 
• Wholesale
• Dry Cleaners
• Construction
• Country Club
• Franchise 
• Entertainment
• Non-profit
• Daycare 
• Auto Dealer 

When Is The Filing Deadline For The ERC? 

As of August 2023, businesses are still able to file Employee Retention Credit (ERC) claims for both the 2020 and 2021 tax periods. The deadline for ERC claims related to the 2020 tax periods is April 15, 2024, while the filing deadline for the 2021 tax period is extended to April 15, 2025.

The Bottom Line 

Clients most poised to benefit from Paragon Prime Group's expertise are those committed to investing in their own long-term financial well-being. PPG believes that everyone deserves access to quality financial planning services from a team genuinely invested in their success, delivering verifiable results. The collaborative efforts of Paragon Prime Group are always client-centric, amplifying their ability to achieve more for each customer.

Committed to securing clients' future financial stability, PPG oversees the entire application process from start to finish. Once clients are screened and initially qualified, they can rest easy knowing that PPG will be there to ensure a seamless process in pursuit of the Employee Retention Credits, alleviating any need for further concern or involvement.

Disclaimer: This material is for informational purposes only and should not be relied on for legal, medical, financial, or any other form of professional advice.