As the pandemic continues to impact businesses, the employee retention tax credit (ERTC) is one of the few relief programs that can help affected business owners retain their employees. However, many businesses are still unaware of this program, or they’re simply running out of time to claim it. If you’re a business owner looking for financial relief, it’s crucial to act fast and claim the ERTC before it’s too late.
What is the employee retention tax credit?
The ERTC is a refundable tax credit that provides financial relief to businesses that have been impacted by the COVID-19 pandemic. The credit is equal to 50% of qualified wages paid to employees between March 13, 2020, and December 31, 2021, up to a maximum credit of $7,000 per employee per quarter.
Eligibility for the ERTC
To qualify for the ERTC, businesses must meet one of the following criteria:
– The business was fully or partially suspended due to a government order related to COVID-19, or
– The business experienced a decline in gross receipts of more than 20% in any quarter compared to the same quarter in 2019.
Businesses that averaged more than 500 full-time employees in 2019 are also eligible for the ERTC but can only claim the credit for wages paid to employees who are not providing services.
Act now – Benefits to claim the ERTC
Claiming the ERTC can provide significant benefits to businesses. Here are just a few of the many reasons why you should act now:
– The ERTC is a refundable tax credit, which means that businesses can receive a refund even if they don’t owe any taxes.
– The credit is generous, offering up to $28,000 per employee if the business has been impacted by the pandemic for the entire year.
– It can help businesses keep employees on their payroll, reducing the risk of layoffs and promoting economic stability.
– The credit can be claimed retroactively, allowing businesses to seek relief for 2020 and 2021.
How to claim the ERTC
To claim the ERTC, eligible businesses can file Form 941, Employer’s Quarterly Federal tax Return, for the quarters in which they paid qualified wages. Additionally, eligible businesses can use Form 7200, Advance Payment of Employer Credits Due to COVID-19, to request an advance payment of the credit rather than wait until filing Form 941.
Act now – Final thoughts
As the COVID-19 pandemic continues to impact businesses, relief programs like the ERTC can provide much-needed financial relief. However, with the end of 2021 quickly approaching, time is running out to claim this credit. Therefore, it’s crucial to act fast and consult with a tax professional to determine your eligibility and secure your claim before it’s too late. Don’t miss out on this valuable opportunity to support your business and your employees.