How Does a Recovery Startup Business Qualify for ERC?
The ERC for Recovery Startups is a federal program designed to stimulate economic growth by providing grants and low-cost financing for innovative businesses that started after February 15, 2020. This program is a part of the federal government trying to help small businesses after the pandemic and hence, stimulating the economy. The eligibility criteria to qualify for ERC is now relaxed and the timeframe to apply for the same has been extended to give an opportunity to businesses for achieving maximum benefits. You can Get help filing for ERC from an ERC specialist to ensure maximum credit.
There are many other programs put forward by the government to help businesses post-pandemic. However, unlike other programs like PPP, ERC doesn’t have to be paid back nor does it comes with any defined frames to spend funds. And that makes ERC great for startups.
Here are some criteria for qualifying for ERC.
Your business must have begun its business operations on/after February 15, 2020
To qualify for ERC as a Recovery Startup Business, a business must have begun its business operations on or after February 15, 2020. You can use this date to determine whether you are eligible for the ERC. The term operations are used in lieu of business. Basically, it means that if your business has not yet started generating money or operating, it can’t qualify for the ERC program.
You must maintain average gross receipts that do not exceed $1 million for both 2020 and 2021
According to federal law, an eligible business must maintain average gross receipts that do not exceed $1 million for both 2020 and 2021. This is a great relief to most businesses whose gross receipts fluctuate significantly from one year to another.
You must employ one or more employees
If your business does not yet have employees, you do not qualify for ERC. In order to qualify for ERC, you must be operating and maintaining an average of one or more employees. ERC is basically a program to encourage employers to retain their employees on the payroll despite the effects of COVID restrictions on their business.
You may not qualify for the Employee Retention Credit through previously-issued qualifying events
In order to qualify for the ERC, you cannot have received a bonus or credit through ERC for the complete or partial shutdown of your business.