During the pandemic, many businesses faced losses and adverse effects that stunted their financial growth and progress. If your business was affected by Covid-19, you might likely be familiar with Employee retention credits(ERC). There are specific steps to achieve the amount and Qualify for ERC 100% Risk Free. Detailed steps are involved in claiming ERC credits. 

Many business owners and employers might not know the steps for claiming ERC. These credits can provide you with significant help in terms of finances and recovery from the effects of the pandemic. Hang onto this article while we uncover and simplify the steps for claiming ERC credits: 

  • Wages 

The first step toward claiming ERC starts from an employer’s wages or income. The employer must maintain or note their wages and other related health insurance costs. These costs must be held each quarter on the employer’s quarterly employment tax returns. 

  • Reporting costs

Once the employer has the records of wages and health insurance costs, they must report each cost when filing tax returns. Usually, the employer may file tax returns for each quarter. While filing quarterly income tax returns, the employer should ensure to report the costs incurred during the quarter. Once done, the employer would be required to fill the Form 941 in the second quarter to report their wages.

  • Documentation 

Apart from filing the forms for applying for ERC, the employer would be required to submit some documents covering a brief of their business and the income. The employer should contact an ERC specialist to ensure all documents are up to date without missing any essential details. 

  • Submission 

Once done, the employer must submit the documents and forms to the IRS. The employer’s tax consultant can help submit each document while reporting the quarterly tax returns. 

Will the employer have to pay back ERC?

Many people might be confused about claiming ERC credits for their business. Such is the case with the question about paying ERC credits back. Some employers might ask their tax consultants or auditors if they would be required to pay back ERC credits in the future. 

However, ERC is a fully refundable tax credit. Eligible employers for the ERC scheme can quickly claim the ERC credits when paying certain employment taxes. Many employers might think that these credits or refunds would be a loan. Although ERC credits are not a loan, no employer would be required to pay the amount back. The employer would be able to get ERC credits after their tax returns.