As the business world slowly but steadily recovers from the pandemic, it’s important that employers prioritize retaining their workforce. The employee retention tax credit (ERTC) can help make this a reality. In fact, Q3 2021 is the perfect time to leverage the ERTC to protect and grow your business.
For those who might not be familiar with ERTC, it’s an incentive program introduced by the CARES Act in 2020 to encourage employers to keep their workers amid the pandemic. Simply put, the ERTC provides tax credits to employers who keep their employees on payroll and continue paying them as they normally would. For most businesses, this amounts to a credit of up to $5,000 per employee.
Now, as we look toward the third quarter of 2021, there are several reasons why ERTC is a smart strategy for businesses.
First, the pandemic still greatly affects the labor market. Even though the number of vaccinated people is rising and restrictions are slowly easing up, many employees are still hesitant to return to work full-time. By offering incentives such as the ERTC, businesses can provide employees with the financial cushion they need to feel secure, ultimately increasing retention rates.
Second, the ERTC is a no-brainer way to save on tax expenses. The credit can offset payroll tax liabilities or be claimed as a refund if your tax liability is less than the amount of your credit. This can make a huge difference in your business’s bottom line.
Third, the ERTC program has extended through the end of 2021, meaning that there is still time for businesses to take advantage of the program. Considering how effective the program has been at encouraging labor retention, businesses really shouldn’t miss out on this opportunity.
Finally, there’s a fair chance that the ERTC program won’t be extended. With vaccination rates increasing and the economy recovering, some lawmakers might not see the point in keeping the program going. This means that businesses should take full advantage of the program while they still can.
In conclusion, the third quarter of 2021 is the perfect time for businesses to start taking advantage of the employee retention tax credit. The program offers incentives to retain employees while also helping to offset tax expenses. Not to mention, there’s no better time than now, as the program is set to expire at the end of the year. It’s a win-win situation for employers and employees alike.