Q: What is the ERC?

It’s great news for businesses. The Employee Retention Credit (ERC) is a fully refundable payroll tax credit — essentially a reimbursement for a portion of payroll taxes. Unlike a deductible, which decreases a business’ taxable income, a credit reduces the amount of total tax owed to the IRS. If qualified, you may receive total tax credits from the IRS for up to $26,000 per employee. What’s more, it’s also possible to receive a cash payment from the IRS in surplus of what you paid in payroll taxes. Your ERC application is an opportunity to take advantage of every dollar you paid in payroll in 2020 and 2021—and a big shout-out to you for employing people during the pandemic!

Question 1

What happens after I submit my ERC application?

Accepted Answer

After you complete your ERC application with the Lendio Team, our ERC expert partners have our full confidence. Expect to hear from them as they guide you through the next steps of the process, including:

Gathering required documentation. (No guesswork)
Identifying all opportunities to maximize the credit. (Expertise counts)
Preparing & filing required tax forms on your behalf. (Make it easy)
Keeping you updated after your ERC application is complete. (Don’t miss a thing)

Question 2

What is the ERC?

Accepted Answer

It’s great news for businesses. The Employee Retention Credit (ERC) is a fully refundable payroll tax credit — essentially a reimbursement for a portion of payroll taxes.

Unlike a deductible, which decreases a business’ taxable income, a credit reduces the amount of total tax owed to the IRS. If qualified, you may receive total tax credits from the IRS for up to $26,000 per employee. What’s more, it’s also possible to receive a cash payment from the IRS in surplus of what you paid in payroll taxes.

Your ERC application is an opportunity to take advantage of every dollar you paid in payroll in 2020 and 2021—and a big shout-out to you for employing people during the pandemic!

Question 3

When did the ERC start?

Accepted Answer

ERC applications were first accepted in early March 2020 with the CARES act. At the time, businesses couldn’t elect to participate in both the PPP loan and ERC program. As of March 2021, it’s now possible to take advantage of both, if managed correctly.

Good news is, you still have time! To claim your ERC money, because it’s a payroll tax credit, you must amend your previously filed 941’s. Generally, you can amend a 941 form for up to three years from the time you originally filed.

It’s best not to wait—or guess. Start your ERC application with the experts now.

Question 4

How much can my business qualify for?

Accepted Answer

2020: Up to $5,000 per W-2 employee. SMB’s are eligible to receive up to 50% of “qualified wages” (up to $10,000 per employee) paid out from March 13, 2020 through the end of 2020.

2021: Up to $21,000 in credits per W-2 employee. The government loosened things up for 2021 and increased the credit to 70% of “qualified wages”—up to $10,000 per employee, this time per quarter. (Q1-3)

Note: Different rules apply if you qualify for “Recovery Startup” Tax Credit, if your business start date is after Feb 15, 2020 with less than $1 million in gross receipts. Must have paid W-2 employees.

In total, you could potentially receive up to $26,000 in tax credits per W-2 employee payroll tax filings throughout all of 2020 and three quarters of 2021.

Question 5

Do you charge for this process?

Accepted Answer

There are no upfront charges or fees to determine your ERC eligibility, and you will never pay out-of-pocket. Once your credit is successfully processed with the IRS, our fee is lower than the competition at 20%. We only get paid if you get paid and there are no other hidden fees or obligations.

Question 6

How to apply and file for the Employee Retention Credit.

Accepted Answer

To apply for the ERC, you will need to file an amended payroll tax return for each qualifying quarter using IRS form 941-X.

To calculate the correct credit amount for your company, you will need the following documentation:

Payroll reports
Gross receipts showing revenue collected by quarter for 2020 and 2021
Government order information with details on the impact of the government order on your business
Documentation for other grants, credits, or PPP loans that you received
Quarterly payroll tax filings

Lendio’s tax experts will help you format and document this information correctly as part of the application process.

Question 7

Is the ERC a grant?

Accepted Answer

The ERC is a refundable tax credit. It is similar to a grant since businesses do not have to repay the money they receive.

Question 8

What is an ERC loan?

Accepted Answer

The ERC is a refundable tax credit, not a loan. Qualifying businesses can apply for the tax credit to receive a refund on their payroll taxes. The money does not need to be repaid.

Fast and simple from start to funding.

Fast and simple from start to funding.

Find out if you’re eligible with our ERC application.

Great news!

You may qualify for the ERC if:

Paid W2 employees

Decreased revenue*

Suspended operations

You’re in safe hands.

Streamline results.

Remove guesswork.

How to apply for the Employee Retention Credit.

Fill out the online application to see if you qualify.

File.

Collect.

Why use Lendio?

$300M

5000

$9B

Additional information

Answers to Employee Retention Credit FAQs.

Navigating the ERC shutdown test.

How the ERC could be worth thousands for your business.

FAQs

See if you qualify for the ERC.