However, there are a number of steps that must be taken before you can claim your ERC rebate. To qualify, your business must meet financial setback criteria, have full-time employees, and calculate qualifying wages. To make this process easier, you can use a free online ERTC Calculator to help determine your eligibility and how much you could be refunded.
The Online ERTC Calculator is available from the IRSâs website and is best viewed in Chrome or Firefox. The calculator provides an
estimated value of the ERC based on the total number of qualified full-time employees (FTEs) at your business. This estimate is based on the average wage and FTEs during the calendar quarter(s) in question. The calculator also includes a chart that shows the maximum ERC possible for each quarter.
To calculate the amount of your qualified ERTC, you must multiply each eligible FTEâs wages by 70 percent. This will give you the amount of ERTC you are entitled to for each quarter in which your business experienced a
significantdecline in gross receipts compared to the same quarter of the previous year. Then, you must divide the ERTC amount by the number of quarters in the period in which your business was closed to find the corresponding percentage reduction in gross receipts.
Qualifying Wages
You must calculate the qualified wages for each employee for each of the calendar quarters in which your business was ERTC Credit Calculator closed due to the pandemic. These wages must be reported on Form 941 as the employerâs payroll tax deposit. The ERTC credits are offset against the employerâs employment tax liability.
It is important to note that you cannot double-dip for credits. If you receive an ERTC refund and are also receiving a Work Opportunity Tax Credit from the government or a grant as part of Coronavirus Aid Relief and Economic Security Act (CARES), you can only take credit on those same wages once.
Lastly, you must ensure that the qualified wages you claim are those not eligible for PPP loan forgiveness. The IRS has clarified that tips will be included in qualifying wages if they are subject to FICA. This means that if your employee regularly receives $20 or more in tips in a month, then these would be included as qualifying wages.
The nuances of this program can be confusing for some business owners. Luckily, Dean Dortonâs team of nonprofit experts is here to provide consultation, collaboration, or confirmation on your journey back to sustainability. We look forward to supporting you and your community in this time of need! If you have any questions, contact Kaydee Ruppert at Dean Dorton. She is the Accounting & Financial Outsourcing Manager and a member of our Nonprofit Team. She has been following the evolving relief opportunities in this time of crisis, and can offer assistance navigating and maximizing these resources
