LAS VEGAS (KTNV) — For many, COVID may be in the rearview mirror, but for others in our local business community, the days of COVID continue and the financial burdens remain.
At Vegas Valley Plumbing, owner Keith Chapman still remembers the days of COVID when his business almost went under.
"I wouldn't have survived the pandemic without this funding," he said.
The Employee Retention Credit, better known as "ERC" is federal funding that was offered during the COVID pandemic to help businesses survive.
"It gives the business owner up to $26,000 between the years of 2020 and 2021 as an eligible credit," said Andrew Leavitt with the Nevada Financial Literacy Advisory Council and Pinnacle Lending Group. "They claim for each employee, and they can get up to $260,000 as an actual tax credit back to them. And there are no restrictions on it like there was for 'PPP,' which is the Paycheck Protection Program that you can't get anymore."
Leavitt turned Chapman onto the program, and he says it was a big help.
"It pretty much saved us as a company," Chapman said. "So we weren't able to really do much until the ERC came. And that helped kind of comfort and relieve stress and pressure from the lack of revenue coming in."
Why are we talking about this credit three years later?
"Prices are going sky high, materials are sky high. Getting anything in the supply chain right now is almost impossible to do affordably. Businesses are actually having a lot more financial struggles right now and having a hard time maintaining employees," Leavitt said. "And if you're one of those business owners, this is something you need to look into because it is available until 2025."
While the program has been a success for business owners like Chapman, fraudulent claims have been an issue. Now, the program may be going away for good.
"They are looking to potentially end this program sooner than later. They've put out numerous warnings from the IRS about the fraud and unethical actions that are happening," he said. "So if this program gets cut and you don't have it at least filed into the IRS, you won't get it."
So how can you see if you qualify?
"The first thing they want to do is go in and talk to a tax professional," Leavitt said. "The biggest issue right now with this program is there's a lot of people that have been turned down for the program. They were turned down because they were told that they didn't have a reduction in gross sales receipts. And that's not the only way to qualify."
And the timeline for getting your money is even quicker than you think.
"So, the timeline to get the program if the refund is over $300,000, is probably going to take six months to a year," he said. "If it's under $300,000, it's probably take six months or less."
Leavitt told me:
When a company claims a specific tax credit called the "employee retention credit," they receive a refund. However, after getting this refund, the company needs to update its business tax returns.
This update involves removing certain wage deductions they previously claimed related to employee expenses.
Here's the key point: The company gets back money through the employee retention credit, which means they've had fewer expenses. As a result, they can't claim as much in deductions on their taxes. It's these reduced deductions that might be taxed, not the credit itself.
However, since most companies have already paid their taxes for the year, any extra tax due is usually small.
If you'd like to get in touch with Pinnacle Lending Group, their information is as follows:
6475 S Rainbow Blvd Ste. 102, Las Vegas, NV 89118
(702) 730-2085
