ERTC Frequently Asked Questions

We’ve gathered some FAQs to address common queries about the Employee Retention Tax Credit program. While these answers aim to clear up confusion, they are not definitive eligibility guidelines. We strongly discourage attempting the process independently. Instead, we recommend seeking assistance from our expert team.

For further details and support, please reach out to our dedicated experts.

You can begin veriyfing your eligibility by follwoing this link.

Can I get ERC if I received PPP?

  • Yes, businesses can qualify for the ERTC even if they received 100% PPP loan forgiveness.
  • However, the credit cannot be used on wages claimed in an application for PPP forgiveness.
  • Up to 40% of qualified non-payroll expenses, like rent, can be counted for PPP forgiveness.

Can freelancers receive ERC?

  • No, self-employed freelancers and LLC owners are not eligible employees for the ERTC.
  • S-Corp or C-Corp owners on payroll and providing significant work for the business may be eligible.

Are part-time employee wages eligible?

  • Yes, wages paid to part-time W2 employees are eligible under the ERC.
  • There is no limit to the number of eligible part-time employees.

How many quarters do you need documentation for?

  • Documentation showing eligibility is required for the quarters you wish to claim the ERC.
  • In 2020, only Q2, Q3, and Q4 qualify.
  • In 2021, only Q1, Q2, and Q3 are eligible.
  • ERC began on March 13, 2020, and ended on September 30, 2021.

What are the deadline dates to apply for ERC?

  • For all quarters in 2020, the deadline to apply for the ERC is April 15, 2024.
  • For all quarters in 2021, the deadline is April 15, 2025.

Are tips considered qualified wages?

  • Yes, cash tips of $20 or more received by an employee in a calendar month are considered qualified wages for the ERC.

How soon will I receive my ERC refund?

  • On average, within three to six months of filing.
  • The timeframe can vary depending on when you file your claim and the size of your credit.

What is considered qualified wages?

  • Qualified wages vary based on the year and size of your business.
  • All wages qualify regardless of whether employees worked or not if:
    • In 2020: 100 or fewer full-time employees
    • In 2021: Fewer than 500 full-time employees
  • If you had more employees, qualifying wages are those paid to employees unable to work due to suspended operations or revenue decline.
  • Owner wages and family members’ wages generally do not qualify.
  • Cash tips greater than $20/month are included as qualified wages.
  • A hardship requirement must be met unless you’re a recovery startup business.

What is a recovery startup business?

  • A business that opened during the pandemic can receive the ERC.
  • To be eligible, you must meet the following criteria:
    • Started the business on or after February 15, 2020.
    • Annual gross receipts don’t exceed $1 million for individual 2020 and 2021 tax years.
    • Have one or more W2 employees, excluding owner-operators or family members.

How do you start the qualifying process?

  • You can begin your qualifications by following this link.

Tom & Dena