Struggling With ERC Claims? Why Partnering With KBKG Is Your Best Solution

Thought Leadership by KBKG

If you belong to the majority of Certified Public Accountants, you are likely to encounter both past and present tax returns during the tax season. It is not uncommon for you to be required to file claims for the Employee Retention Credit as well. Your clients may have numerous queries regarding the functioning of the Employee Retention Tax Credit and the feasibility of filing ERC claims for 2020. Given the intricacy of these inquiries, coupled with a surge in fraudulent claims, it is essential to adopt a meticulous approach. Collaborating with KBKG offers you effective remedies for appropriately submitting ERC claims.

Table of Contents:

How Does the Employee Retention Credit Work?

The Coronavirus Aid, Relief, and Economic Security Act first introduced the Employee Retention Credit in 2020. The primary goal was to encourage businesses to keep workers on their payrolls by allowing them to claim credits for wages paid between March 13 and December 31, 2020.

The original credit permitted employers to claim 50% of wages and certain healthcare benefit costs up to $10,000. That works out to $5,000 per employee for 2020. Three more laws passed in 2021 expanded the credit: the Relief Act, the American Rescue Plan Act, and the Infrastructure Investment and Jobs Act. Employers can claim 70% of paid wages and certain healthcare benefit costs with a quarterly upper limit of $10,000. That’s $7,000 per quarter, which eligible taxpayers can receive for the first three quarters of 2021. Recovery startup businesses can claim an additional $7,000 during the fourth quarter.

The Internal Revenue Service has published ERC (or ERTC) tax credit guidelines. Businesses must meet one of three criteria to receive the credit:

  1. They experienced a partial or complete suspension of operations “limiting commerce, travel or group meetings due to COVID-19 and orders from an appropriate governmental authority.”
  2. Their gross receipts significantly declined during 2020 or the first three quarters of 2021.
  3. They qualified as a recovery startup business in the third or fourth quarters of 2021.

How Can KBKG Benefit Me?

Your clients won’t just ask how the ERC works. With so many detailed requirements, many clients may not know if they qualify. Those wanting to claim it may have unfiled returns from previous years or wish to file amended returns. They may ask, “Can you still claim Employee Retention Credit for 2020?”

Fortunately, they can do so until Tax Day 2024 using IRS Form 941-X. For the Employee Retention Credit 2021, businesses can retroactively claim the credit until Tax Day 2025. With all the minutiae involved, you may also get questions like, “Do employees get Employee Retention Credit?”

With questions like these, understanding ERC eligibility requirements is essential. Determining what constitutes a “significant loss in gross receipts” is challenging, especially for businesses wanting to file for the ERC for 2020. Similarly, the IRS issued detailed criteria determining which companies qualify as “recovery startup businesses” in Notice 2021-49.

Scam artists also aggressively target firms with promises to help them get this credit even if they don’t qualify. As a result, the IRS is stepping up efforts to investigate ERC fraud and improper filings. Such complexities illustrate the need for preparing accurate, meticulous, and verifiable claims. KBKG offers several ERC services to help you accomplish this objective:

  • Determining employer eligibility status and periods
  • Identifying qualifying employee wages
  • Calculating applicable credits and impacts of PPP loans
  • Reconciling qualified credits with requested advance credits
  • Preparing the reconciled data for IRS Form 941-X
  • Producing documentation to support eligibility for the ERC

Industry-Leading Tax Expertise

Like many other tax issues, the ERC presents a distinctive collection of challenges and complications. You benefit from world-class expertise to handle client questions like, “How does the employee retention credit work?” For over 20 years, KBKG has delivered specialized knowledge and services with the utmost care and diligence. Certified public accountants and businesses work with us to achieve the best possible tax savings through superior-quality turnkey solutions. To get started, request a proposal or call (877) 525-4462.

KBKG is providing the following services to assist with ERC:

    • Determine if the employer qualifies, and if so, for which quarters,
    • Determine which employee wages qualify
    • Calculate credits, including analysis of PPP interplay, and
    • Reconcile actual credits with advance credits requested
    • Prepare reconciled data for Form 941-X
    • Prepare documentation supporting a business’ qualifications


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