Employee Retention Credit
Route Consultant partners with Silicon Ledger to support contractors in applying for the Employee Retention Tax Credit (ERTC) or applying for Remediation. Below, you will find some introductory information on the ERTC and how you can apply for this tax credit to get a much-needed stimulus for your business.
What Is the Employee Retention Tax Credit?
The ERTC is a stimulus program introduced and passed into law as a result of Covid-19 and the Cares Act. The ERTC essentially compensates you for payroll spent on employees during 2020 and 2021.
Note: If you became a contractor after 2019 (even if you started in 2021) you may still be eligible to participate in the program. In fact, if you have paid payroll at all in 2020 or 2021, you can potentially qualify for the ERTC.
Many CPAs are only looking at one qualification criteria: Has your revenue declined by 25% year over year or since 2019? Unfortunately, many CPAs look at that single guidance point and assume that contractors will not qualify for the credit due to the overall business growth that contractors experienced during the Covid-19 pandemic.
Clarifications provided by the IRS allow contractors to qualify for the program in a variety of different ways. You only have to meet one of the many qualification pathways in order to be eligible for the credit. You do not have to meet them all.
How the Process Works
Each of the employees on payroll during the qualified period can earn you a $7,000 per quarter credit. Or, up to $28,000 per employee in 2021. You can obtain additional credit for employees from 2020.
The standard set by the IRS is that contractors have to show that there is at least a “nominal impact” on their business. A “nominal impact” is defined by the IRS as a 10% impact on your company. One way to define an effect is via revenue decline, but our team carefully assesses your employment and settlement records to produce a narrative on other impacts.
If you are interested in determining whether or not your business qualifies, submit an inquiry with Silicon Ledger to begin the Qualification Review Process.
You will receive list of due diligence items within 48 hours. These due diligence items are needed to analyze your business and determine any qualifying criteria.
If you are found to be eligible, Silicon Ledger will write a thorough narrative on your behalf that supports your eligibility for the ERTC before submitting the paperwork to the IRS.
Additional Notes
Most P&D contractors do qualify for the employee retention tax credit! Linehaul contractors are must less likely to qualify due to the nature of the business. If you have a significant percentage of spot runs in your operation, you may be able to qualify for the ERTC.
This entire process can take 7-10 months. At the end of the process, if you receive a credit from the IRS, Silicon Ledger will deduct a success rate from your credit. You are not required to pay anything up front. If for any reason, you do not receive a credit from the IRS or your business is ineligible, then no charge will be made.
Remediation
The Remediation Program is a service offered through Silicon Ledger that aims to assist businesses in reviewing their supporting documents for compliance with the IRS guidelines regarding the Employee Retention Tax Credit.
Silicon Ledger’s Remediation Program includes:
A review of your underlying documentation to assess adherence to IRS guidelines
A review of credit calculation to assess maximization
If necessary, a consultation with an ERTC-focused tax attorney
Companies who self-prepared their ERTC claims or used a third-party provider who did NOT document the impact of the mandates on your business may benefit from obtaining more complete documentation for their files.
Get the Most Out of Your Operation
Route Consultant is the premiere consultant and educator in the last-mile delivery and logistics space. Want to get the most out of your investment? Looking to optimize your operation and maximize profits? Need to teach someone how to successfully manage a delivery operation? Our suite of educational courses capitalize on decades of operational experience to bring you battle-tested strategies and best practices to find success in your business.
