Daniel HonanFounder, Profitable Painter CPA PLLC · I help painting contractors increase profits & cash flow while reducing taxes♦ Bookkeeping ♦ Tax

Painting Business Owners: Do you qualify for the ERC?

Name: Painting Business Owners: Do you qualify for the ERC?
Uploaded: 2023-12-13T14:30:30+00:00
Duration: 47 s
Channel: Daniel Honan
Description: In this segment, the presenter explains the key eligibility requirements for painting business owners to claim the Employee Retention Credit (ERC)…

13 Dec 2023 · 1 min

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In this segment, the presenter explains the key eligibility requirements for painting business owners to claim the Employee Retention Credit (ERC). First, a business must have had employees (not just subcontractors) in 2020 or 2021 and must have 500 or fewer employees. Second, the business must meet at least one of two conditions: a decline in gross receipts compared to a pre‑COVID reference quarter or the prior year, or a full or partial shutdown that was ordered by a government authority. The speaker notes that many painting businesses actually saw revenue increases during the pandemic, but the criteria still apply if the specific conditions are met.

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Can you talk a little bit about how we can know if we qualify for it? First of all, you have to have employees in 2020 or 2021, but no more than 500. If you have subcontractors, for example, but no employees, you would not qualify. So that's the first thing. You have to actually have employees during 2020 or 2021. One of the following things need to have happened: you had a reduction in your tax basis revenue relative to a reference quarter or like a prior year. Basically, Did your revenue go down compared to pre-COVID? If that happened to you, you could potentially qualify. In the painting industry, a lot of folks didn't have this happen. A lot of folks had their revenue go up in 2020 and 2021, but it might apply to you. So that's the first thing. And the second one is that you'll have to have full or partial government shutdown. There has to be a government order associated with that government shutdown.