The IRS Employee Retention Credit: Is It a Loan?

The COVID-19 pandemic brought many challenges to small business owners and employers, including financial struggles. To help combat these difficulties, the government introduced the Employee Retention Credit (ERC) as part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act. The ERC was designed to help businesses keep their employees on thie payroll, even if their operations had been impacted by the pandemic.

There is a great deal of confusion that exists around this program. Many business owners and employers have been left wondering whether the ERC is considered a loan or not. In this article, we'll explore the answer to that question and provide information on why it is beneficial to work with aa CPA to determine if you're eligible for the ERC and calculate the credit.

Is the Employee Retention Credit a Loan?

The simple answer is no, the ERC is not a loan. The ERC is a refundable credit that's designed to help employers offset the cost of keeping their employees on the payroll throughout the pandemic, even if their business was impacted. The credit can be claimed as a payroll tax credit on an employer's quarterly Form 941.

That being said, the process of determining eligibility and calculating the credit can be complex. It is advisable to have the help of someone who is experienced specifically with the ins and out of the employee retention credit. There are some business

Here are some of the benefits of working with a Certified Public Accountant (CPA) to navigate the ERC:

• Experience and Expertise: CPAs have the experience and expertise to help business owners and employers understand the ERC and determine if they're eligible. They can also help calculate the credit and ensure that all necessary documentation is in order.
• Save Time and Effort: The process of determining ERC eligibility and calculating the credit can be time-consuming and complex. Working with a CPA can save business owners and employers time and effort, allowing them to focus on running their business
• Avoid Mistakes: Determining ERC eligibility and calculating the credit requires an understanding of complex tax laws and regulations. A CPA can help avoid mistakes and ensure that all calculations are accurate.
• Maximize Savings: CPAs can help business owners and employers maximize their savings by ensuring that they receive the full amount of the credit they're eligible for.

As you can see, the Employee Retention Credit is a valuable resource for small business owners and employers that have been impacted by the COVID-19 pandemic. However, determining eligibility and calculating the credit can be complex. Working with a CPA can provide peace of mind and help business owners and employers maximize their savings and receive the full amount of the credit they're eligible for.

DAC Funds Me has partnered with team of expert CPAs that are ready to help with no up front retainer fees! To learn more or get started with the qualification process today l, please click the button below.