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ERC Digital Application Guide

January 25, 2022

Welcome to the ERC Digital Application Guide

The Employee Retention Credit can seem tricky and complicated at first. But don't worry, we've got you covered! This guide contains sections for getting started, eligibility and credit estimation and filling out the application itself. If you still need assistance, please call our Tax Specialists at (888) 230 4576.

Getting Started

            To make the process go smoothly, it’s best to gather all your documents and information you’ll need to before you start the application. Here’s a short list of information we’ll require to calculate your credit and populate your 941-X (Adjusted Employer's Quarterly Federal Tax Return).

1. Gross receipts

            Gross receipts for your business for each quarter in 2019 through Q3 2021. Gross receipts include:

  • total sales net of returns and allowances  
  • all amounts received for services
  • any income from investments
  • any income from incidental or outside resources 

            NOTE: This information can typically be found in your accounting software such as QuickBooks, NetSuite or Xero. Other sources could be your personal or business tax returns (Schedule C) from 2019, 2020 or 2021.

2. Governmental Orders, Suspended Locations and Dates:  

           Your company may be eligible for the ERC if operations were suspended as a result of a governmental order limiting commerce, travel or group meetings as a result of COVID-19. Governmental orders can be specific to your state, county or city and can generally be found on the jurisdiction’s website.  

            The business impact related to the suspension should be more than nominal (more than 10%). Examples of business metrics that may illustrate a more than nominal impact include a reduction in transactions, employee hours or hours of operation. 

            A list of suspended business locations with suspension dates (if you’re eligible due to a suspension mandated by a governmental order). If you don’t have a list, a quick internet search for government shutdowns in your area is the fastest way to find that information. If you can’t find a government order, our customer support team can assist you.

  1. Payroll Data:

            Detailed payroll information for your business, including health plan expenses – data which is usually included in your full-time employees’ paystubs. This payroll information can be downloaded from your payroll provider. You’ll need to provide ERC Digital information such as:

  • Employee First and Last name
  • Payroll frequency (e.g., weekly, biweekly)
  • Pay period start and end dates
  • Pay period total hours (total hours paid in the given pay period)
  • Pay period total Medicare wages
  • Pay period qualified health expenses  

  1. Employee pre-tax health care contributions:

            This information can be found within an employee’s payroll data as these amounts are typically withheld from employee wages for each pay period. Employer contributions can typically be found in the benefits section of your payroll provider’s online portal.  


  1. Previously submitted 941 and  941-X forms from 2020 and 2021:

            Form 941, Employer’s Quarterly Federal Tax return, is the quarterly employment tax return required to be filed with the IRS. Form 941-X, Adjusted Employer’s Quarterly Federal Tax Return, is the amendment to the Form 941. Forms 941 and any previously filed Forms 941-X are typically available on your payroll provider’s online portal. We can collect your previously submitted 941 and 941-X forms on your behalf and will require your consent to do so.  

  1. PPP Loan Data: Detailed information (amounts, dates, etc.) about any PPP loans your business received.  

Eligibility and Credit Estimator

To determine if your business is eligible for ERC and to estimate your potential credit, follow the steps below using our Eligibility and Estimation Tool [insert link].

  1. Enter the number of full-time W-2 employees your business employed on average in 2020 and 2021.
  1. Click ‘Continue’

Government Shutdown  
  1. Select the applicable quarters in 2020 and 2021 where your business was more than nominally impacted by a government shutdown.  
  1. If you were affected by government orders for any part of the quarter, count the whole quarter.
  1. This is a common area of confusion for ERC applications. Check out our guide for details and examples of government orders. [insert link to govt shutdown guide]
  1. Click ‘Continue’

Gross Receipts
  1. Select the applicable quarters in 2020 and 2021 where your gross receipts dropped by 50% from 2019 for 2020 and 20% from 2019 for 2021.
  1. Remember, you can most easily find this information in your business accounting software.
  1. Click ‘Continue’

  1. This screen will show you whether your business may be eligible for the ERC and a range of what your estimated credit may be, based on your previous entries.
  1. Please note this is not a guarantee you will receive a refund equal to the value calculated by us and your actual Employee Retention Credit will be determined by the IRS after you file.
  1. After reviewing your estimate, click ‘Continue to Application’ to start your ERC Application. You may also access the Application directly by clicking on ‘Apply Now’ no matter where you are on our website.

Application Tool

You can quickly and easily prepare and calculate your Employee Retention Credit by following the steps below using our Application Tool [insert link].

  1. Review the three portions of the application and make sure you’ve gathered all the required materials (see the ‘Before you Begin’ section above)
  1. Click ‘Start’

Business Profile

Contact Information

        1. Enter the following information

  • First and Last name of an individual authorized to file tax paperwork on behalf of your business or organization
  • Primary email address  
  • Primary phone number
  1. Click ‘Continue’

Business Information

       1. Enter the following information

  • EIN
  • Legal Business name – this is the name of your business as it appears in your Articles of Incorporation
  • Industry – select your industry from the drop-down menu
  • Role – type of role you perform in your business. If you are a CPA filing on behalf of a business, enter “CPA”.
  • Business website – enter your business website address
  • Business address – enter your business street address
  1. Click ‘Continue’


       Before we continue you will need to agree to our terms of service, acknowledge our disclaimers and consent to disclosing your Tax Return Information with us.

  1. Click ‘Review the Agreement here’ . The ERC Digital Terms of Service will open in a new window. The terms include details and disclosures for how ERC Digital integrates with organizations such as the Internal Revenue Service (IRS) to improve your experience.
  1. After reviewing the agreement, enter Today’s Date  
  1. For Digital Signature - Enter your full name
  1. Click ‘Continue’
  1. Read and acknowledge the disclaimers on the next screen by checking the box ‘I acknowledge all of the above’
  1. Click ‘Continue’
  1. Check the box on the disclosure screen
  1. Enter today’s date and your full name
  1. Click ‘Continue’

Complexity Questions

       This step will help us determine if your application can be processed by ERC Digital or will need to be transferred to a global tax firm that we are teaming up with to accommodate the level of complexity some employers face.

  1. Review each question and check Yes or No
  1. Click ‘Continue’
  1. If you answered ‘Yes’ to any of the questions you will be directed to our Big 4 accounting firm teammates to continue your application with their highly experienced tax professionals.
  1. Check the box to agree to allowing us to share your application information with our Big 4 accounting firm.  
  1. Click ‘Continue to’
  1. If you answered ‘No’ to these questions you will be directed to continue with the Application Data Collection section

Application Data Collection

Full-time employees in 2019

  1. Enter the average number of full-time, US based employees for 2019 (Add up the number of full-time employees you had on the payroll each month, then divide by 12 to calculate the average)
  1. Be sure to note the ERC requires full-time employees subject to W2 reporting, not full-time equivalents.
  1. If your company is part of a controlled group or an affiliated services group, count the employees from all companies in the group.
  1. Click ‘Continue’

Gross Receipts

  1. Enter the total gross receipts for each quarter for 2019-2021 in the boxes on the screen.
  1. Remember: gross receipts includes total revenues your company received from all sources before subtracting any costs or expenses. This is often more than just revenues from sales.
  1. Click ‘Continue’

Governmental Orders

  1. Click ‘Yes’ if your business was either fully or partially suspended due to a government order from any jurisdiction in which your business operates.
  1. Select whether your company has multiple locations. If you have multiple locations, we will calculate your suspension date ranges in order to maximize your credit.
  1. Enter the suspension date range your business experienced
  1. Add additional suspension periods if your company experienced more than one
  1. If you have any questions, you can review our in-depth Government Shutdown guide here [insert link]
  1. Click ‘Continue’

Acknowledge Overlapping Programs

  1. There are several programs that use wages and/or health plan expenses to calculate the respective benefit. The IRS prohibits using the same wages for ERC that were used in other programs. In order to prevent duplicate use in these programs you must exclude wages  used in other programs from the data you provide to ERC Digital for our calculation.
  1. Check the box acknowledging you understand that any wages used or forgiven for any other government programs must be excluded from the ERC calculation.
  1. Click ‘Continue’

Document Submission

        Use this screen to upload your employee payroll and health expense data through our secure portal. There are two options to do this:

  1. Download our template and follow the instructions included to fill out payroll and wage data. When you’re complete, contact our Tax specialists who will send you a secure link to upload your template.  
  1. Upload the required payroll and health expense information in any format (no files over 10MB please1) and we’ll put it in our template format for you. When complete, we will share it with you via our secure document portal for your review. After you confirm its accuracy, you can upload it to complete this step.
  1. Once your payroll and health expense data are uploaded, click ‘Continue’

Review and Confirmation

  1. This screen shows your completed application. Take time to review the accuracy of the information you provided.  
  1. When finished, check the box attesting the information you provided is correct and you are authorized to file for the ERC on behalf of the business.
  1. Click ‘Submit’ – please note that once you submit your application for processing, we will begin calculating your credit. Pressing ‘Submit’ will not send your application to the IRS.

Calculation and Filing

  1. Your ERC credit calculation will be completed in 5-7 business days.
  1. During this time, we will update you on your application’s status via email. However, if you wish to contact us, please feel free to call or email us at [insert contact details]
  1. Once your calculation is complete, you will receive an email notifying you
  1. In your calculation email you will be presented with options for filing your ERC claim. You may choose to either:
  • Receive the raw calculation data and give it to your PEO or Payroll Tax provider for filing, or;
  • ERC Digital can populate the 941-X on your behalf for the eligible quarters and mail to the IRS.