ERC Program FAQ’s
I. What is the ERC Program?
The Employee Retention Credit (ERC) is a program set up under the CARES Act in response to the Pandemic. The credit repays a portion of wages paid by employers financially impacted by the Pandemic. The IRS will send your business a check for the amount you qualify to receive. These funds are not a loan that must be repaid nor are you restricted in the use of the funds – it is your business’s money to do with as it pleases.
II. Intent of the Legislation
Reward Employers for retaining their employees through the pandemic.
III. Who Qualifies for the ERC Program?
Businesses and 501(c) organizations that had their operations suspended or limited during the pandemic or that meet certain economic tests qualify for the ERC Program. Organizations with 500 or less full-time employees can consider all employee compensation (wages/health) for all employees. For those businesses over 500 employees, special rules regarding which employees are eligible may apply limiting the compensation to those employees paid who were inactive during suspended or limited operations.
IV. How much is my business claim worth?
Businesses can receive up to $26,000 per employee with the average award being around $16,000 per employee.
V. How much will this cost?
Your company will pay nothing until and unless your company is paid. At the time the calculation is submitted to the IRS an invoice will be generated to your company which will be due from your company to the E. J. Saad Law Firm, PC when your company receives the funds from the IRS. If your company is not paid, then your company owes nothing.
VI. Is the ERC comparable to the PPP Program?
| PPP | vs. | ERC |
| Public Information | Not Public. Part of Tax Return. Even Public Companies are not required to disclose unless material. | |
| Limited to Businesses with 300 FTS or Less | Companies of any size are eligible. | |
| Limited to decline of 25% of Gross Receipts | Businesses either fully partially suspended due to government orders or decline of 20%+ of gross receipts | |
| Repayment possibility which requires specific use of proceeds | No payback | |
| Max Loan Size not to exceed $2M/2.5 months max of average payroll | No specific dollar limitation | |
| Private Equity owned and public companies not eligible. | Attorneys’ agreement sets out, in writing, protections for you in the event of an challenge. | |
| All companies eligible |
VII. What is the process and how long will it take?
Once we receive your contract and initial intake form, we will review the answers and then schedule a time to speak with the company representative. After this discussion, assuming we have all the documentation we need, we will send a claim package to your representative for signature and submission.
In most cases it will take approximately 4 to 8 weeks to prepare the claim and to submit to the IRS. Payment will take place in most cases between 4 and 6 months after submission. However processing times at the IRS tend increase with the amount of claims submitted.
VIII. Why should I use the EJ Saad Law Firm, PC?
The E.J. Saad Law Firm, PC is very experienced in the evaluation, processing and handling of economic claims for businesses with years of experience handling sensitive data for thousands of businesses. Based on your information, we offer our clients an efficient and accurate process to determine if your business qualifies and how much it should receive based upon current rules applicable to the ERC Program.