Are you eligible for the Employee Retention Tax Credit?

Have you claimed what you are entitled to receive?

Countless businesses faced intense economic turbulence when the Covid-19 pandemic pitched the world into survival mode without much warning. In response to the unprecedented crisis, the US government offered a lifeline to companies – albeit a temporary one – in the form of the employee retention tax credit (ERTC). But many companies have not claimed what they are entitled to receive, deterred by the daunting task of navigating the labyrinth of bureaucratic red tape and regulations to receive the credits.

A little about the ERTC.
The employee retention credits provided some welcome relief at a critical time. Companies are weathering inflation, rampant global supply chain disruptions resulting in shortages, and rising labor costs. And then there’s the added challenge of finding enough people to do the work in a tight labor market. The employee retention tax credit (ERTC) was initially created as a component of the Coronavirus Aid, Relief, and Economic Security (CARES) Act in April 2020. The incentive was designed to encourage employers to keep staff on the payroll as they coped with the pandemic. The credit’s lifespan has been extended twice, first as part of the Consolidated Appropriations Act, and a second time as part of the American Rescue Plan Act. The refundable payroll tax credit is calculated based on a percentage of eligible wages for companies that faced disruptions leading to a significant decline in gross receipts.

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Greg made us aware of a potential refund related to the employee retention tax credit. He was able to quickly determine our eligibility after a review of high-level financial information. Greg worked tirelessly to maximize our potential refund. Our school community greatly appreciates his initiative and attention to detail.

Montessori school treasurer

How long you have to make a claim.
Businesses and their financial professions had originally expected the credit to be offered through the end of 2021, but the Infrastructure Investment and Jobs Act President Biden signed into law on Nov. 15 terminated the credit retroactively for the fourth quarter of 2021. That meant employers who experienced a decline in business because of Covid-19 would no longer be able to claim the credit on wages paid after Sept. 30, 2021. The updated timeframe for wage eligibility was given as follows: 2021: Jan. 1 to Sept. 30 2020: Mar. 13 to Dec. 31 There was one exception to the credit termination: eligible startup recovery businesses would still be allowed to claim the ERTC until the end of December 2021. Qualifying business were defined as those that began to conduct trade or business after Feb. 15, 2020, with average annual gross receipts that didn’t exceed $1 million.

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When Greg approached me about the possible refund related to the employee retention tax credit, I nearly fell off my chair. Neither my internal staff nor my CPA had mentioned this opportunity to me. We hired Blackburn Capital Advisors on a contingency basis. Greg did an amazing job dotting the Is and crossing the Ts. We are expected to receive over $400,000 in refunds. Amazing.

CEO of construction staffing company

Requirements and limits to the amounts you can claim.
The part of the infrastructure bill that discusses the ERTC is Section 80604, which amended the Internal Revenue Code’s Section 3134(c)(2) and terminated the credit retroactively. But some businesses had already reduced their employment tax deposits for wages paid in October and November, or received an advance payment of the ERTC. Companies were concerned that they might now face interest and late deposit penalties under Section 6656 of the code. This past Dec. 6, the IRS issued its guidance on the matter, providing relief from the penalty. As long as employers repay the monies owed by the due date of their applicable employment tax return that encompasses Q4 2021, they can avoid interest and penalties on the shortfall. That applies whether those funds were received in the form of an erroneous refund, or a reduction of deposits owed to the IRS.

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As a small interior design business with a couple of employees, we are very dependent on our cash flow. Working with Greg to find us new opportunities for funding – whether PPP, EIDL, and now the ERTC – has been a miracle for the cash flow of our business. With this support, we have been able to continue to keep our employees hired while we wait for the bottleneck in our industry to clear.

Interior design firm owner

In recent months, Blackburn Capital Advisors has been working with various clients to determine their eligibility for the employee retention tax credits (ERTC). The good news is, we are still catching refunds.

To date, we’ve discovered more than $1.5 million in refunds on $2.3 million in eligible wages for our clients.

Please feel free to reach out to us for an initial discussion and consultation to verify your eligibility.

Fill out and submit the form below or contact us directly at (703) 544-7047.

Additional Links

https://www.irs.gov/coronavirus/employee-retention-credit
https://www.irs.gov/coronavirus/employer-tax-credits
https://www.irs.gov/newsroom/new-law-extends-covid-tax-credit-for-employers-who-keep-workers-on-payroll

Guidance on the Employee Retention Credit under Section 2301 of the Coronavirus Aid,
Relief, and Economic Security Act
Notice 2021-20
https://www.irs.gov/pub/irs-drop/n-21-20.pdf

Guidance on the Employee Retention Credit under the CARES Act for the First and
Second Calendar Quarters of 2021
Notice 2021-23
https://www.irs.gov/pub/irs-drop/n-21-23.pdf

Relief from Penalty for Failure to Deposit Employment Taxes
Notice 2021-24
https://www.irs.gov/pub/irs-drop/n-21-24.pdf

Examination of returns and claims for refund, credit or abatement;
determination of correct tax liability
Rev. Proc. 2021-33
https://www.irs.gov/pub/irs-drop/rp-21-33.pdf

Guidance on the Employee Retention Credit under Section 3134 of the Code and on
Miscellaneous Issues Related to the Employee Retention Credit
Notice 2021-49
https://www.irs.gov/pub/irs-drop/n-21-49.pdf

Termination of the Employee Retention Credit under Section 3134 of the Code in the
Fourth Calendar Quarter of 2021 for Certain Employers
Notice 2021-65
https://www.irs.gov/pub/irs-drop/n-21-65.pdf