As a business owner, you know how hard it is to attract, hire and retain employees. With the job market as competitive as ever, it’s important to offer incentives that keep your top talent from jumping ship to another company. One such incentive is the employee retention tax credit (ERTC) program.
The ERTC program was created by the Taxpayer Certainty and Disaster tax Relief Act of 2020 to encourage businesses to keep their employees on the payroll during the COVID-19 pandemic. The credit is available to eligible employers who have been adversely affected by the pandemic and who either fully or partially suspended operations, or had a decline in gross receipts.
The ERTC is a refundable tax credit that can be claimed by eligible employers for wages paid to certain employees during the pandemic. The credit is worth up to 70% of qualified wages, up to a maximum of $5,000 per employee per quarter.
To qualify for the ERTC, businesses must meet certain criteria. First, they must have experienced a significant decline in gross receipts during the pandemic. Second, they must have either fully or partially suspended operations due to a government order, or experienced a significant decline in gross receipts. Third, they must not have received a loan under the Paycheck Protection Program.
If a business meets these criteria, it can claim the ERTC for wages paid to employees during certain quarters of the pandemic. The credit can be claimed on the business’s quarterly tax filings and can be refunded if the credit exceeds the business’s tax liability.
The ERTC program can help businesses thrive in a number of ways. First, it can help businesses retain their top talent by offering incentives to keep employees on the payroll. Second, it can help businesses save money on payroll taxes by offsetting the cost of wages paid to certain employees. Third, it can help businesses weather the pandemic and emerge stronger on the other side.
If you’re a business owner who has been adversely affected by the pandemic, it’s worth exploring whether the ERTC program can help your business thrive. By retaining your top talent, saving money on payroll taxes, and weathering the pandemic, you can position your business for success in the months and years ahead.