As the third quarter of 2021 begins, businesses are looking for ways to enhance employee retention to maintain a stable workforce. One effective solution is to take advantage of the employee retention tax credit (ERTC).
The ERTC was introduced by the government in response to the COVID-19 pandemic to help businesses retain their workforce. However, the credit has now been extended and expanded to cover the third and fourth quarters of 2021.
The ERTC provides eligible businesses with a tax credit of up to $7,000 per employee per quarter. To qualify for the credit, a business must meet several criteria, including significant decline in gross receipts or a full or partial shutdown due to government orders.
The credit is intended to offset the cost of retaining employees and can be used to cover wages and healthcare benefits. Eligible businesses can claim the credit on their payroll tax returns or use the advance payment option.
To maximize the benefits of the ERTC, businesses should take proactive measures to enhance employee retention. One effective strategy is to provide employees with incentives such as training programs, paid time off, bonuses, and other perks.
Creating a safe and supportive workplace culture is also critical in retaining employees. Businesses should foster positive work environments, provide opportunities for growth and advancement, and promote work-life balance.
Another effective strategy is to communicate with employees regularly and encourage feedback. Businesses should also use performance evaluations to identify employee strengths and areas of improvement and create development plans to support employee growth.
The ERTC is an excellent opportunity for businesses to enhance employee retention and stabilize their workforce. By taking proactive measures to create a supportive workplace culture and retain valuable employees, businesses can reap the full benefits of the credit and position themselves for long-term success.