1.Complex eligibility requirements: The ERC program has complex eligibility requirements that can be difficult for some employers to navigate. This can make it challenging for some employers to determine whether or not they qualify for the credit.
2.Limited duration: The ERC is only available for wages paid between March 13, 2020 and December 31, 2020. This may not provide enough support for employers who are still struggling with the economic impact of the pandemic beyond this time frame.
3.Limit on wages: The credit is limited to 50% of qualified wages, up to a maximum of $5,000 per employee per year. This means that some employers may not be able to fully offset the costs of retaining employees.
4.Potential for fraud: The ERC program may be susceptible to fraud as some employers may attempt to claim the credit for wages that do not qualify or for employees that they do not actually retain.
5.PPP loan and ERC cannot be claimed for the same wages: Employers will need to choose which program to apply for and for which wages. This can cause confusion and in some cases, the employer might not be able to claim the best program that would help them more.
It's important to note that the ERC program is constantly changing, it's best to consult with a tax professional to understand the current rules and regulations, and whether or not your business can benefit from the program.
I recommend that you click on this link to find information on the Employee Retention Credit, including information on how to calculate the credit and how to claim it on your tax return. To begin your ERC or have questions click below
