Besides financial hardship, there are many other factors that could allow your start-up business to be eligible for ERC. 

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Any business that began operations after February 15, 2020 is classified as a recovery start-up business. For businesses like these, there is a possibility to claim up to $50,000 per quarter for the third and fourth quarters of 2021. 

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The credit available is calculated as 70% of up to $10,000 of qualified wages per employee, capped at $50,000. In other words, with 8 employees that make at least $40,000 a year, you may obtain the full credit for both quarters of 2021.

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If your recovery start-up business meets these requirements, you may qualify for this kind of relief through the Employee Retention Credit:

• You began operations after February 15, 2020
• The average annual gross receipts for the business is less than $1 million
• You have one or more employees that are not majority owners
• Your business is not otherwise eligible for other ERC relief due to a full or partial suspension of operations or a decline in gross receipts

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Business owners who have previously submitted their claims for the Employee Retention Credit are likely curious about the anticipated timeline for receiving the tax credit. Given the significant impact of the pandemic on numerous businesses, the IRS faces a substantial workload in processing these applications.

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The timeline for each case varies. While it is possible to get your refund processed within 8 months, it could potentially take longer. 

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If you wish to check the status of your refund, you may call the IRS or use the “Where’s My Refund?” feature on the IRS website. 

Recovery startup businesses can utilize the Employee Retention Credit to cover pandemic-related wage expenses. However, it is vital to give careful attention to eligibility requirements and accurate reporting when claiming this credit. The IRS closely scrutinizes the claims for legitimacy, and submitting any errors can result in audits and other complications.

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To safeguard your startup’s interests and ensure you receive the relief you deserve, it is crucial to seek professional assistance. Strategic Tax Planning is comprised of a team of experienced CPAs that are dedicated to working closely with you. We can use our knowledge to ensure compliance with all qualifications and accurate representation of facts, enabling you to navigate the intricacies of ERC and prevent costly errors.