For those who are unfamiliar, Employee Retention Credits have proven to be a sign of relief for many employers and employees. ERC credits allowed several employers to keep their employees on the payroll. ERC credits have been a reward for the employers who tried keeping their workers on the payroll even when the Covid-19 pandemic escalated due to multiple factors. You should check out ercguaranteed.com if you want to get started with your ERC application.
Apart from the benefits of ERC credits, many business owners and employers are still unaware of the application procedure for the latter. Some rumors about the qualification of ERC confused many business owners and employers. Such steps stopped them from applying for ERC credits. However, you must read the steps below to apply for ERC credits.
Procedure for applying for ERC:
1. Payroll and wages
Before claiming ERC credits, each employer and business owner must account for each employee’s payroll and other wages. ERC credits were passed under the CARES act to help employers keep their employees from being unemployed. Similarly, the employer must note each employee they kept on the payroll and account for their wages. This step would be helpful for the employer when they file quarterly tax returns.
2. Costs and expenses
The pandemic forced many businesses to bear costs and expenses to keep their business running. However, the employer can take advantage of the ERC credits and settle their negative balances. Before applying, the business owner must maintain a record of each cost related to health insurance and employee wages. These records would come in handy when finalizing the application.
3. Forms and documents
Once the employer has maintained a record of each cost and employees’ payroll, the next step would require them to fill out specific forms and prepare documents related to the business and its expenses. The business owner must fill out form 941 in the second quarter of their tax returns. It would be in the employer’s best interest to contact an ERC specialist to ensure their application and documents are free of errors and mistakes that would otherwise diminish the ERC credits.
4. Finalizing the application
After the business owner has filled out the forms and prepared their application, they would be required to submit their application in the form of tax returns. Employees can report their costs and employee wages when they file quarterly tax returns. Once reported while filing tax returns, the employer should wait a few months until they get the ERC credits.