Spring has sprung (sort of), Opening Day is here, and your 2021 tax returns are due. So let this serve as your final reminder that you need to file or extend your tax returns. But while you have them out, there is one more thing you can do with them (other than sending them to your commercial lender, upload here). Have you filed for the Employee Retention Credit? Don’t know what it is? Here is an overview of the program.

The Employee Retention Credit (ERC) was created as part of the CARES Act and was extended and amended by later legislation to take its current form.  Under ERC, business owners are able to get a refund on their federal payroll taxes for all of 2020 and the first three quarters of 2021. If you received any PPP loans, you can still qualify for the ERC.

To qualify for the program:

• Employee count between 5 and 499 (not including employees who are also owners of the company)
• Credit amount dependent on year and number of quarters applied for.
  • 2020 credit is $5,000 per employee for the year
  • 2021 credit is $7,000 per employee per quarter for Q1, Q2, and Q3. There is no credit for Q4 of 2021.
  • This means that for one employee for all quarters, you could receive a refund of $26,000 per employee.
• Eligible businesses that experienced a decline in gross revenues in the calendar quarter compared to the same quarter in 2019 OR were closed or partially closed due to government order and didn’t claim the ERC when they filed their original returns can take advantage of filing adjusted employment returns. These would be filed using an IRS Form 941X, Adjusted Employer’s Quarterly Tax Return or Claim for Refund to claim credit for the eligible quarters.

Sounds great, but maybe a little too technical? Don’t worry! First Community Bank and Trust has partnered with Innovation Refunds, a company that has specialized in helping small businesses apply and receive the ERC. They have a support team and specialized CPAs who will work with you to get your application completed and submitted to the IRS. So far, Innovation Refunds has worked with over 6,000 businesses to claim over $450 million in tax rebates.

FCBT and Innovation Refunds will be releasing a portal to accept applications in the coming weeks. We’ll send out another email as the release approaches. To make sure you’re on the list, click below to be added to the ERC mailing list. Also, please share this information with friends and other businesses you work with.

The above information has been brought to you by Cameron Ohlendorf and First Community Bank and Trust's Commercial Loan Department. If you have further questions or would like to speak with Cam, call him at (708) 946-2246.