However, with the right tools and guidance, you can make the process much easier and maximize the opportunity presented by this credit.
Fortunately, Kaydee Ruppert, Dean Dorton Accounting & Financial Outsourcing Manager, has put together this guide to help you navigate the ins and outs of ERTC so that you can get the most out of this valuable credit for your business.
ERTC Tax Credit Calculator
The first step in the ERC process is to calculate your number of full-time employees.This number is important because it determines how much How does the ERC Work of your qualified wages can be included in the ERC calculation. The IRS defines a full-time employee as someone who works an average of 30 hours per week or 130 hours per calendar month.
Once you have your employee count, it’s time to start looking at the amount of qualified wages you paid to your employees during the COVID-19 pandemic. This is where things get more complicated, as there are a lot of rules and guidelines that you need to keep in mind when determining the amount of your credit. The best way to do this is by using an ERTC calculator, which will give you a more accurate estimate of your potential credit than simply calculating the total number of employees you had at any given point during the pandemic.
The ERC Calculator will ask you questions such as the number of full-time employees that your business employed during 2020 and 2021, and the amount of qualified wages that you paid to those employees in those years. It will also ask you about any government orders or closures that may have impacted your business during those times.
It’s also a good idea to take the time to review the various sections of the ERC application to ensure that you are accurately reporting all of the information required. This will help you avoid any issues with the IRS that could delay the receipt of your credit.
While the ERC is available to all businesses, it does have some unique restrictions that affect how much of the credit you are eligible for based on your size and the number of workers that you employ. For example, if you are a small business with 100 or fewer full-time employees, you will receive a higher percentage of the ERC than larger businesses that have more workers.
While it’s possible to do the ERTC calculation on your own, it’s highly recommended that you work with a tax professional to ensure that you are getting the most out of this valuable credit. They can help you understand which quarters you qualify for, how long you have to file, and how to navigate any complicated regulations and deadlines that might come up along the way. Plus, a professional will be able to keep up with the ever-changing laws and guidelines that govern the ERC, which can sometimes be difficult to stay on top of