In the first episode of Masters of Deductions, Tim and John discuss the Employee Retention Credit (ERC) and its significance for tax savings. Tim, a tax professional and attorney, breaks down the ERC in simple terms. The ERC is a refundable payroll tax credit that can provide up to $26,000 per employee. This program was established in 2020 during the COVID-19 pandemic to assist employers impacted by the crisis.

To qualify for the ERC, there are three tests. The first test examines the decline in gross receipts, comparing the quarters of 2020 and 2021 to the same quarter in 2019. If gross receipts declined more than 50% in 2020 or more than 20% in 2021, you may qualify. The second test considers whether your operations were fully or partially suspended due to government orders, irrespective of revenue changes. The third test is specifically designed for businesses that started after February 15th, 2020. These businesses can potentially receive a refund of up to $100,000 per employee, regardless of the other two tests.

Tim emphasizes that the ERC is crucial, offering significant tax savings. It's important to note that it's not too late to apply for the credit, as there are two upcoming deadlines. The first deadline is April 15th, 2024, for the 2020 ERC, and the second deadline is April 15th, 2025, for the 2021 ERC. Tim encourages listeners to explore their eligibility and file a claim with the IRS to take advantage of this opportunity to save money. Don't miss out on the potential benefits of the ERC – tune in to this episode of Masters of Deductions to learn more!