People worldwide have been affected by COVID and the guidelines and restrictions imposed by various governments to control the pandemic. What many people don’t know is that COVID also had an economic impact on companies of all sizes. In order to do their part in easing the financial burden on their businesses and employees, the federal government passed the CARES Act in March 2020 with two programs, PPP and ERC or Employee Retention Credit.
Both these programs aim at reducing the impact of COVID restrictions imposed by the government on businesses across all industries. The Employee Retention Credit particularly encourages employers to retain their employees on the payroll. However, not all businesses qualify for ERC claims. But if your business has been somehow affected by COVID, you can consult Sunrise Business Solutions to find out whether you qualify for an ERC claim.
Here are 3 main queries people have about ERC.
- How Does a Business Qualify for ERC?
To qualify for ERC, a business must have met any of the following COVID-related hurdles:
- Businesses that were partially or completely shut down because of COVID restrictions imposed by the government
- Businesses that were forced to layoff employees due to COVID (such as businesses in food & beverage, hospitality, and real estate)
- Businesses that are not producing any revenue due to COVID restrictions imposed by the government
Businesses affected similarly can apply for ERC and receive monthly payments from the government. The monthly payment can cover up to 60% of your payroll expenses for the month.
- Can I Apply for PPP and ERC?
Yes, you can. The Payment Protection Program(PPP) and Employee Retention Credit(ERC) are different types of government assistance.
The Payment Protection Program is actually a loan program from the government. If you qualify for PPP, you should be able to receive a government loan. Whereas, the Employee Retention Act is government assistance to ensure that employees are retained on the payroll.
And yes, you can apply for both.
- Is ERC Available in 2022?
Yes, it is. The Employee Retention Credit program implemented under the CARES Act is available in all states in the United States in 2022. The purpose of this act is to provide assistance to small businesses that have been affected by government-imposed restrictions due to the COVID outbreak. Therefore, if your business is affected by COVID restriction, then you better check the scope of qualifying for Employee Retention Credit.