If you are a business owner or employer in the United States, it’s time to take note of an important deadline that is quickly approaching. The employee retention credit (ERC) for 2021 is set to expire soon, and if you want to take advantage of this valuable tax credit, you need to act fast.
The ERC was first introduced as part of the CARES Act in 2020 to help businesses retain employees during the COVID-19 pandemic. The credit was extended and expanded in 2021 as part of the American Rescue Plan Act, making it an even more valuable resource for businesses struggling to stay afloat during the ongoing economic challenges.
The ERC is a fully refundable tax credit that allows eligible employers to claim a credit against payroll taxes for a percentage of qualified wages paid to employees during the COVID-19 crisis. The credit amount can be as high as $7,000 per employee per quarter in 2021, making it an extremely valuable source of relief for businesses of all sizes.
However, the ERC for 2021 is only available for a limited time. The final deadline for claiming the credit is December 31, 2021, meaning that businesses have just a few weeks left to take advantage of this opportunity. To be eligible for the credit, businesses must meet certain criteria, including experiencing a significant decline in gross receipts or being subject to a government-mandated shutdown due to COVID-19.
Additionally, the ERC is available to businesses that took Paycheck Protection Program (PPP) loans, so even if you have already received PPP funds, you may still be eligible to claim the ERC for 2021.
If you haven’t yet taken advantage of the ERC for 2021, now is the time to act. By claiming the credit, you can alleviate some of the financial strain caused by the pandemic and keep your employees on the payroll during these challenging times. The funds from the ERC can be used to cover payroll expenses, and many businesses have found it to be a lifeline during the ongoing economic uncertainty.
To claim the ERC for 2021, you will need to carefully review the eligibility requirements and gather the necessary documentation to support your claim. This may include documentation of gross receipts, proof of government-mandated shutdowns, and records of qualified wages paid to employees.
It’s important to note that claiming the ERC can be a complex process, so if you need assistance, consider reaching out to a qualified tax professional or accountant who can help ensure that you are in compliance with all requirements and maximize your credit amount.
As the deadline for claiming the employee retention credit for 2021 quickly approaches, businesses cannot afford to wait. Taking advantage of this valuable tax credit can provide much-needed relief and support for employers and employees alike, so don’t miss out on this critical opportunity. Make sure to take action before it’s too late and make the most of this last call for the ERC in 2021.