“My business was collapsing, it felt like there was nothing I could do,” Myrtha Chang, the owner of Mathnasium, expressed to us.
COVID-19 hit the world hard, and business owners just like Chang were in dire need of assistance. It was hard to turn a profit, and many business owners were in a desperate position to stay afloat.
Many owners decided to lay off their employees in hopes of reducing costs, and Chang considered doing the same. However, she made the decision to keep her employees. While she was confident in her choice, it doesn’t mean it was an easy one. In the time of remote learning, Chang had lost about two-thirds of her clientele. Her usual bustling summers were starkly quiet, and in her time of need, Chang turned to her accountant for help.
Chang had heard about the Employee Retention Credit and suggested they investigate it. Her accountant advised against it, convinced she wouldn’t be able to qualify for it. Though Chang was unable to waste any opportunity for help, so she went ahead and contacted ERC Benefits for further guidance.
“Many people are completely unaware of the changes in rules for the ERC, and that’s where we come in,” The Chief Revenue Officer, Jay Feilen shares, “The ERC was made specifically to help smaller businesses, so the ways to qualify are easily accessible to anyone who needs it. If it was another complicated process, it deterred people from accessing it and that would only lead to more failing businesses. We don’t want that at all.”
The IRS announced the terms for qualifying for the ERC. Businesses would need to provide proof of severe loss of revenue due to COVID-19 restrictions. A minimum of 20% loss in comparison to previous years would have to be shown. This also applies to new businesses founded in 2020 too, only their comparator would have to be their forecasted earnings for 2020 rather than previous years. A business would also have to show they have retained the number of employees they had before restrictions had taken place.
If a business does qualify for ERC, it can expect to receive a credit of 50% of the wages for its employees during the year 2020. This amount was later increased for 2021 to 70% per quarter, and even receiving a Paycheck Protection Program (PPP) loan doesn’t disqualify you from the credit.
“ERC Benefits were an immense help. My accountant had outdated information, and I am so grateful these rules were changed.” Chang reflects on the help she was given.
When the ERC was originally created, a business would have to show a 50% loss in earnings to qualify but this had now been revised and adjusted to the current amount of 20%.
“After I hired the ERC Benefits consultant, this whole process was a breeze. They worked hard and extremely thoroughly to make sure I received as much as I could possibly be entitled to. I’m glad I put my trust in them sooner rather than later.”
It’s lucky that Chang approached ERC Benefits when she did because sadly the ERC is not an infinite amount. The scheme is set to expire at the end of 2023, but businesses will still be able to apply throughout 2024 for compensation for the years while the credit was active.
We recommend to all business owners that believe that have been severely impacted by the pandemic to reach out to ERC Benefits for guidance and support in claiming the Employee Retention Credit. You can contact ERC Benefits on 561-680-4677 or visit ercbenefits.com for more information.