As Q3 2021 ramps up, many small and mid-sized businesses are looking for ways to stabilize and grow their companies after a tumultuous year. One noteworthy opportunity for businesses to receive assistance is through the employee retention tax credit (ERTC). This valuable tax credit can offer substantial financial relief to businesses that meet certain qualifications and are looking to retain employees amidst the ongoing pandemic.
What exactly is the employee retention tax credit?
The employee retention tax credit is a government tax credit provided to businesses that retain employees throughout a certain timeframe. The credit is available only to businesses that meet certain qualifications, including the size of the business, the impact of the COVID-19 pandemic on the business, and specific tax and accounting rules. Previously, the ERTC was only available to businesses that remained closed due to government-mandated shutdowns, but recently the program has expanded to allow more flexibility for qualifying businesses.
How can the ERTC benefit my business in Q3 2021?
For qualifying businesses, the ERTC can provide a substantial financial benefit in Q3 2021. Here are some of the benefits to consider:
1. Retaining employees: The ERTC is designed to help businesses retain employees by offering a valuable tax break. This means that businesses can keep valuable team members on board, even in financially uncertain times.
2. Financial relief: The ERTC allows for a tax credit of up to $7,000 per employee, per quarter. This amount can add up quickly, providing much-needed financial relief to businesses looking to grow or maintain profitability.
3. Increased flexibility: Recent updates to the ERTC program have allowed for more flexibility in terms of qualification criteria. This means that more businesses may be eligible for the tax credit in Q3 2021, providing a wider range of opportunities for financial relief.
4. Strengthening long-term operations: By retaining employees and receiving an ERTC credit, businesses can stabilize their operations in the short term, while also preparing for long-term growth opportunities. The additional financial breathing room provided by the credit can allow businesses to invest in areas such as product development, marketing, or staff training.
Final thoughts
As Q3 2021 gets underway, businesses are looking for ways to stabilize operations and grow financially. The employee retention tax credit can offer substantial financial relief to qualifying businesses, providing a tax break for retaining employees and strengthening operations. By taking advantage of this opportunity, businesses may be able to withstand the ongoing challenges posed by the pandemic and emerge stronger than ever before.