For any business that survived the COVID-19 Pandemic, the Employee Retention Credit (ERC) is like a personal tax return for your business. It is cash in your pocket, and 2023 is a prime year to collect your credits!
You are only eligible to collect credits if you are a qualified business owner. If you are not a business owner or authorized representative, please do not proceed with submitting the form for yourself or on behalf of your company. What you can do is bring it to the owner’s attention as they may not be aware the ERC is available to them.
Please confirm you have read this information and that you are a business owner who may be eligible for the ERC by clicking the box at the end of the form.
Sagemont Tax is the only ERC advisory firm to have CPAs from the largest tax firms in the world under the same roof as attorneys from the largest law firms in the world. Our team collaborates to provide every client with a comprehensive suite of ERC services, including analyzing, filing, and claiming their ERC from the IRS.
The Sagemont Tax team of CPAs, lawyers, and payroll specialists have spent countless days and nights developing a specialized strategy that maximizes your ERC, on average 40% higher than your payroll company or income tax CPA.
1. Tax Guidance: Kenneth Dettman (former partner at Alvarez & Marsal and Co-Head of their ERC Taskforce) signs every ERC filing as paid preparer; thereby taking responsibility for our clients’ ERC tax positions;
2. Legal Guidance: We work side-by-side with some of the top law firms in the country specializing in the ERC and even work with several lawyers who were integral in writing the ERC legislation;
4. Timing: We can finalize and submit an ERC claim to the IRS within a month from the time a client signs our engagement; and
5. Price: Sagemont Tax generally charges 10-20% of the credit (competitors generally charge 15-30%).
Complete these 5 steps, and we handle all the rest.
The Employee Retention Credit (ERC) is a cash credit for businesses that remained open through the COVID-19 pandemic. Under the ERC, the IRS rebates you for wages paid to each employee you retained during times your business was being affected by COVID. The total value of the rebate is 50% on up to $10,000 in wages in 2020 – or $5,000 total per employee in 2020 – plus 70% on $10,000 in wages per quarter for the first three quarters in 2021 – or $21,000 total per employee in 2021. This adds up to a huge amount of money – $26,000 total per employee!
Initially, companies were only allowed to choose either the PPP or the ERC, but not both. When the CARES Act was originally released in March 2020, the PPP was generally chosen over the ERC by most businesses for the following reasons:
1) The PPP was much easier to understand and compute. Businesses were fairly certain they’d be able to get a dollar-for-dollar benefit for the PPP, while the ERC only appeared to provide a benefit of 50 cents on the dollar, at most.
2) The PPP usually resulted in cash funding in April/May of 2020, while the ERC could take months to obtain.
In December 2020, the rules were changed and eligibility under the Program was expanded dramatically, allowing small business owners access to the benefits under the ERC, even if they took PPP 1 or PPP 2!
Under the ERC, Uncle Sam rebates you for wages paid to each employee you retained during times your business was being affected by COVID. The total value of the rebate is 50% on up to $10,000 in wages in 2020 – or $5,000 total per employee in 2020 – plus 70% on $10,000 in wages per quarter for the first three quarters in 2021 – or $21,000 total per employee in 2021. This adds up to a huge amount of money – $26,000 total per employee!
One more note: The PPP is governed by the Small Business Administration (SBA) and the ERC by the Internal Revenue Service (IRS). While there is overlap in similar concepts like aggregation of commonly controlled business and testing employee headcount, there are major differences between the specific application of those rules. Fear not, we are well equipped to guide your business through these nuances and help you claim the credit you are owed.
Sagemont Tax is the ONLY ERC Advisory firm to have CPAs from the largest tax firms and attorneys from the best legal firms in the world under the same roof. Our team combines their expertise to provide a uniquely holistic ERC service offering that ensures technical soundness that cannot be matched by traditional income tax CPAs.
Yes! With recent updates, businesses are eligible even if they claimed a PPP loan. It is important to note that in retroactively allowing PPP borrowers to claim the ERC, Congress included a rule that prevents businesses from using the same payroll costs to obtain PPP loan forgiveness and the ERC. This makes sense as employers should not receive a tax credit based on an amount paid for wages with proceeds from a forgiven loan.
No! It’s a cash refund from the IRS, not a loan, for you to spend however you’d like, including distributions out to owners.
A business is eligible if they meet one of two tests. Only one test is required and it’s possible to qualify under one test for one period, and another test for a different period.
1) The “Substantial Decline in Gross Receipts” test or SDGR. This test compares quarterly periods in 2020 and 2021 to the same quarterly period in 2019. The relevant percentage decline is 50% in 2020 and 20% in 2021. In nearly all cases, if a business qualifies under this test for a quarter, it will qualify automatically for the following quarter (under the alternative quarter rules), provided at least 6 months of eligibility. The alternative quarter rules can be quite complicated, and we work with our clients closely to help evaluate eligibility.
2) The FPSO test applies for the periods of time when the operations of a business were shut down or subject to certain restrictions/modifications (such as reductions in operating hours and capacity limit restrictions) due to a COVID governmental order.
Sagemont Tax has experienced all scenarios and has helped hundreds of clients through the complicated tax laws to maximize their ERC – typically 40% more than most CPAs, bookkeepers, and payroll providers!
Yes. IRS Notice 2021-20 provides that an employer receiving an ERC refund should not include the credit in gross income for federal income tax purposes; however, under rules similar to IRC Section 280C (which also applies to other tax credits, such as R&D credits), such employer should reduce their wage expense by such amount in 2020 and/or 2021, as applicable.
If the company (or its owners in the case of an S-corporation, partnership, or disregarded entity) was in a taxable loss position greater than the amount of the credit, a reduction of wage expense may only reduce their loss position for such year with no additional tax due because of the credit.
If the company was in a taxable income position in either 2020 and/or 2021 (or had a loss less than the credit), the reduction of wage expense related to the credit may result in an increase in federal taxable income for that year. The same would hold true to the extent that claiming the ERC shifted a company from a taxable loss to a taxable income position.
After being made aware of the Employee Retention Credit by a private equity firm, we contacted [Sagemont Tax]. They went through the multi-prong approach with us to claim our credits and we were shocked to find out there was a viable path to eligibility well into 2021. We felt confident with [Sagemont Tax’s] expertise from the beginning and the process was smooth. They built a strong, well-documented case to present to the IRS and the timeline met our expectations. We are very satisfied with our experience with [Sagemont Tax].
National
[Sagemont Tax] was exceptional to work with. Our representative carefully answered our many questions about the program and was extremely communicative throughout the process. The professionalism [Sagemont Tax’s] team demonstrated is why we consistently refer business owners and volunteer organizations their way. We highly recommend contacting [Sagemont Tax] to see what credits are available to you!
Johnson County, IN
As a risk-averse non-profit organization focused on our community, we were very cautious in our approach to filing for the Employee Retention Credit but the experts at [Sagemont Tax] eased our concerns. They took on the burden of hiring an outside law firm to provide legal analysis and provide additional assurance to support our position. Sagemont Tax made the process very streamlined and simple, with clear instructions through every step, making data-gathering easy. The current combination of inflation and lack of affordable housing has dramatically increased the need for our services. This refund has made an enormous impact on our mission and allows us to help more members of our community!
Red Bank, NJ
When I was introduced to the team at [Sagemont Tax], I had already started the ERC filing process with another company. However, communication with the other agency had been inconsistent and information processing was extremely slow. I was immediately impressed with [Sagemont Tax’s] knowledge of the program’s latest updates and eligibility qualifications. Once I switched to their firm, they really took a hands-on approach. As a business owner with a full schedule, it was a relief that they were able to complete a majority of the filing process on my behalf. Overall, the experience with [Sagemont Tax’s] team was fantastic, and I highly recommend working with them. In fact, I have sent many of my colleagues their way and they have had a similar positive experience.
Orlando, FL
As a new business owner, COVID restrictions took a huge toll on my yoga studio. My retirement dream became grim through decreased membership and increased operational costs. My HR provider let me know about the ERC and that Yoga Six would be eligible for a quarter. After talking to other Yoga Six owners, I learned that my business may be eligible for additional quarters and I was put in touch with [Sagemont Tax]. The team at [Sagemont Tax] advised that my business was in fact eligible for the credit for additional quarters, and they assisted me through the process of obtaining our credit of over $100k. [Sagemont Tax] walked me through everything, and although there is a lot of tedious paperwork, it was straightforward and [Sagemont Tax] made it pretty dang easy. The ERC allowed me to avoid bankruptcy and pay myself back for the money I had to use to stay afloat during the COVID years – I tell all business owners I meet to look into the credit and learn more from [Sagemont Tax].
Creekside, TX
After learning about the ERC through other Right at Home owners, we reached out to our accountant for preliminary validation. Our accountant didn’t believe we qualified, which is when we were put in touch with [Sagemont Tax]. After speaking with the team, we quickly learned we did qualify as our business of providing home care to the elderly and disabled was heavily affected by COVID restrictions. [Sagemont Tax] helped us through the entire process of filing for our credit, they were on top of everything and kept us informed throughout every step. Receiving this credit has allowed us to pay off debts we incurred during the pandemic and helped us with hiring – which continues to be a struggle for business owners in this new post-pandemic world. We understand that other business owners are reluctant regarding the ERC, but we tell people that having a great firm to support them like [Sagemont Tax] made it a no-brainer.
Oklahoma City, OK
My experience with [Sagemont Tax] was one of those rare business collaborations in which my organization’s needs were not only considered to be of the highest priority, but even after our work together had been completed, [Sagemont Tax]continued to support us. Our credit came at a crucial time and made it possible for us to sustain operations and even grow. I have nothing but praise for the service, professionalism, and compassion demonstrated by the staff of [Sagemont Tax].
Miami Lakes, Florida