Canadian Digital Adoption Program
Federal Grant To Modernize Your Business
You may qualify for federal funding to increase digital technology into your business.
Grants available to digitize your businesses
We have helped businesses claim millions in relief funds
Helping businesses navigate & file their ERC refund claims.
ERC REFUNDS
Financial Relief For Businesses Impacted by Covid-19
“The ERC offers a welcome cash infusion as owners struggle with inflation, rising interest rates and tight labor markets.”
Understanding CDAP:
What is the Canadian Digital Adoption Program (CAP)?
The Employee Retention Credit is a federal tax incentive introduced to help businesses of all sizes to retain their employees during the challenging years of COVID-19.
The Employee Retention Credit (ERC) was created in response to the economic disruptions caused by the COVID-19 pandemic. The primary goal was to provide financial relief to businesses that were impacted by the pandemic and to incentivize them to retain their employees even in the face of economic challenges.
Business Owners can receive a refundable credit up to $5,000 per employee in 2020, and $7,000 per employee, per quarter (excluding the 4th quarter), in 2021 for qualified wages.
Qualifying for ERC
Who is Eligible for ERC?
Most employers, including both for-profit and nonprofit entities, are eligible for the ERC if they were negatively impacted by COVID-19 in one of three defined ways.
Businesses must have employed more than one W-2 employee during that period in order to qualify. Wages paid to 1099 contractors do not qualify.
If your business was impacted in one of the following ways:
1
A Reduction in Revenue
A business experienced a significant decline in gross quarterly receipts when compared to the same quarter of previous fiscal years.
2
Impacted by Government Orders
The business’s operations were partially or fully impacted by government orders due to COVID-19. This includes businesses that had to close temporarily or reduce operations significantly.
3
Recovery Start-up Program
If you started a business after February 15, 2020, and had annual gross receipts less than $1,000,000
Get Your ERC Refund Started Today!
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Our ERC Process
How It Works:
Our team of dedicated CPA’s will work with you through the entire process
Check Eligibility
Tell us a little about your business
to confirm your qualification
File Your Claim
We'll help you gather all the required
documents to file your claim
Get Your Money!
Get your payment in the mail
from the US Treasury
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Common Questions
FAQ
How long before I get my check?
The processing time for receiving an Employee Retention Credit (ERC) check can vary based on factors such as the complexity of your application, the volume of applications being processed, and any potential issues or discrepancies that may arise.
In general, it’s advisable to allow several weeks to a couple of months for the entire process, from submitting your application to receiving the credit.
Who will be working on my file?
Most employers, including both for-profit and nonprofit entities, are eligible for the ERC if they were negatively impacted by COVID-19 in one of three defined ways.
Businesses must have employed more than one W-2 employee during that period in order to qualify. Wages paid to 1099 contractors do not qualify.
What are the eligibility requirements for ERC?
Business Impact due to COVID-19: To be eligible for the ERC, a business must have experienced either of the following during a specific period:
Partial or Full Suspension of Operations: The business’s operations must have been partially or fully suspended by government order due to COVID-19. This includes businesses that had to close temporarily or reduce operations significantly.
Significant Decline in Gross Receipts: Alternatively, the business must have experienced a significant decline in gross receipts. The specific threshold for the decline varied depending on the time period being considered.
Types of Businesses: Most employers, including both for-profit and nonprofit entities, were eligible for the ERC. However, there were some exceptions. For example, governmental entities and certain small business entities that received Paycheck Protection Program (PPP) loans were generally not eligible.
Employee Count: The ERC had different rules for businesses of different sizes:
Small Employers: For employers with 100 or fewer full-time employees, all wages paid to employees during the eligible period could potentially qualify for the credit, regardless of whether the employees were working or not.
Large Employers: For employers with more than 100 full-time employees, the credit typically applied only to wages paid to employees who were not working due to a partial or full suspension of operations or a significant decline in gross receipts.
Wage Limitations: The maximum credit amount was based on a percentage of qualified wages paid to eligible employees. The credit was capped at a certain amount per employee per quarter.
How much money can I receive?
The amount of money someone can receive when submitting an Employee Retention Credit (ERC) claim depends on various factors, including the size of their business, the number of eligible employees, the wages paid, and the specific time periods being claimed. The ERC is calculated based on a percentage of qualified wages paid to eligible employees, subject to certain limits.
Percentage of Qualified Wages: The ERC is generally calculated as a percentage of qualified wages paid to eligible employees during specific quarters. The percentage can vary based on the time period being claimed.
Maximum Credit: The maximum credit amount per eligible employee per quarter is subject to a cap. For example, the ERC might be calculated as 50% of qualified wages, but if the qualified wages exceed a certain amount, the credit is capped at that higher amount.
Eligible Employee Count: The credit is typically calculated based on a maximum number of eligible employees. This count might vary depending on whether the business is considered a small employer (100 or fewer full-time employees) or a large employer (more than 100 full-time employees).
Eligible Wages: Eligible wages include not only actual wages but also certain health plan costs that are allocable to those wages.
Claiming Periods: The ERC’s availability was originally tied to specific periods affected by the pandemic. As of September 2021, the ERC’s availability and calculation methods have evolved with changing legislation.
What are gross receipts for ERC?
Gross receipts, in the context of the Employee Retention Credit (ERC), refer to the total revenue a business generates from its primary operations before deducting any expenses or costs. Gross receipts include all forms of income, such as sales, services, interest, dividends, rents, royalties, and any other sources of revenue, except for certain specific exclusions.
What is the non refundable portion of the employee retention credit?
Here’s how the refundable and non-refundable portions of the ERC work:
Refundable Portion: The refundable portion of the ERC means that if the calculated credit amount exceeds the employer’s total federal employment tax liability for a specific calendar quarter, the excess credit can be refunded to the employer. This refundable portion could provide businesses with additional funds even if they had no tax liability.
Non-Refundable Portion: The non-refundable portion of the ERC refers to the portion of the credit that can be used only to offset certain federal employment taxes. If the credit amount exceeds the employer’s tax liability for these specific taxes, the excess credit cannot be refunded. Instead, it can be carried forward and used to offset future tax liabilities.
What is a recovery startup business?
A recovery startup business is a new venture that emerges in the wake of an economic recession, financial crisis, or other disruptive event that has negatively impacted the economy.
These startups aim to contribute to economic recovery by introducing innovative products, services, or solutions that address the challenges created by the crisis.
Will an ERC claim trigger an audit?
While there’s no way to guarantee whether an Employee Retention Credit (ERC) claim will trigger an audit, it’s important to understand that any significant tax credit claim, including the ERC, could potentially increase the chances of being selected for an audit by tax authorities. Tax audits are a standard part of the tax system and are designed to ensure compliance with tax laws and the accuracy of claims.
Here are a few factors to consider regarding ERC claims and audits:
1. Complexity: If your ERC claim involves complex calculations or if your business structure and operations are intricate, it might catch the attention of auditors who could want to ensure the accuracy of your claim.
2. Inconsistencies: If there are inconsistencies or discrepancies between the information you provide in your ERC claim and other tax documents, it could raise concerns and lead to an audit.
3. Random Selection: In some cases, tax authorities select returns for audit at random. This means even a straightforward ERC claim could potentially be subject to audit as part of routine procedures.
4. High Claim Amount: If your ERC claim is for a significant amount of money relative to your usual tax liabilities, it might be subject to increased scrutiny.
5. Government Focus: During periods of economic stimulus programs, like those initiated in response to the COVID-19 pandemic, tax authorities might pay closer attention to claims related to those programs to ensure they are being used appropriately.
6. Error Rates: If there is a history of errors or inconsistencies in your past tax returns, it could increase the likelihood of being selected for an audit.
It’s important to note that the intent of audits is not solely to find errors or discrepancies but also to ensure fairness and compliance across the tax system. If you have legitimate documentation and accurate records to support your ERC claim, you should not be discouraged from submitting the claim. However, to minimize the risk of an audit and ensure that your claim is accurate and well-substantiated, it’s advisable to work with tax professionals who can guide you through the process and help you provide proper documentation.