However, the rules for ERC eligibility and qualification are complex. And, despite recent government assurances, there are still plenty of scammers that continue to target businesses and nonprofits attempting to claim the credit.
The IRS is warning taxpayers to be cautious of promoters that are offering to perform ERTC calculations and/or complete federal tax filings for the credit. The agency is seeing aggressive marketing that lures ineligible taxpayers to the credit. And, if a business or tax-exempt organization incorrectly claims the credit, they could have to pay back the money with interest and penalties.
To qualify for the CARES Act employee retention credit (ERC), a business must have experienced a significant decline in gross receipts during certain eligible quarters of 2020 and 2021.This is often a complicated calculation, a detailed look at a ERTC Credit Tax Calculator businessâs revenue sources and expenses. The calculation also requires a comparison of a businessâs quarterly gross receipts to the same quarters from the previous year.
To help reduce the complexity of the ERC calculation, our team developed an easy-to-use, online tool. It will walk you through all the steps needed to identify whether your business is eligible for the credit and how much of a refund you may receive. Our ERC Calculator will take into account all wages paid to employees, as well as the employerâs share of group health plan expenses and pre-tax salary reduction contributions from employees. It is important to note that the ERC calculation does not include wages paid with PPP or EIDL funds, which should be deducted from the gross receipts used in the calculation.
We recommend that you use the ERC Calculator as a guide for your own ERTC calculation, and that you consult with a tax professional. The CARES Act employee retention credit can be a great source of financial relief for affected businesses and nonprofits, but the eligibility rules and calculation methodology are evolving, and accuracy is critical to avoid problems down the road. The Brotman Law team is available to help you determine your eligibility, maximize your credit and avoid falling victim to scams.
Our ERC Calculator has been updated for the current requirements of the CARES Act. This is a free tool that you can use to quickly assess your eligibility for the ERC. It takes into account the current rules as defined by the CARES Act, including the definition of âsignificant decline in gross receiptsâ and how to calculate qualifying wages for both 2020 and 2021.
To start calculating your eligible wages, enter your data in the light grey cells. Please do not change the content in the light yellow cells, which contain formulas; changing these can cause your calculations to run into errors. Once your qualified wages and health plan expense data are entered, click the
Calculate
button to get an estimate of your CARES Act credit