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Here’s Everything You Need To Know About ERTC
The COVID pandemic affected many businesses like never before. Many companies were forced to consider laying off their employees, while many others had to seize their operations. However, if you run a small business that retained its employees through the pandemic, there is good news for you! Here's everything you need to know about the ERTC program!
The Internal Revenue Service announced a tax credit for small businesses that retained their employees during the COVID period. The Employee Retention Credit was a measure taken to help companies keep their workers employed.
Filing your employee tax credit can be difficult, but we're here to make it a lot easier for you. Many small business owners are unaware of how this credit works, which is understandable because they already have a lot on their plates.
Continue reading this article to learn about Employee Retention Tax Credit. We would also recommend you stick around for the end when we introduce a firm you can work with to claim yours!
What Is Employee Retention Tax Credit?
The Employee Retention Tax program was launched during the early stages of COVID to help small businesses. As fewer customers were leaving, their homes and lockdowns became more frequent, causing many firms to take significant hits. This is why a lot of companies were forced out of business.
The ERTC was introduced as part of the CARES Act Relief packages and rewarded small businesses for retaining their employees. The government offered an incentive by allowing companies to claim a tax credit.
The best part about the ERTC was that it was offered as a tax credit, not a deductible. This meant taxable income wasn't reduced, but instead, businesses had to pay fewer taxes to the IRS. Moreover, the ERTC is still available for companies to claim for both 2020 and 2021.
Who Was Eligible For The Employee Retention Tax Credit?
The Employee Retention Tax Credit was not available for every company. Only businesses with under one hundred employees could claim their ERTC credits. This was great for smaller companies that couldn’t afford to retain their employees through the pandemic. However, there were a few more eligibility factors.
Businesses that were impacted by the pandemic with closures and a considerable decrease in income could be eligible for the program. For the year 2020, a 50% decrease in 2019 receipts would make you eligible for the program. In 2021, your revenues had to be lower than 80% of 2019's receipts to qualify for the credits; however, the total credits received were significantly increased.
How Does Employee Retention Tax Credit Work?
The Employee Retention Tax Credit (ERTC) was a provision in the Coronavirus Aid, Relief, and Economic Security (CARES) Act. This was a legislative package passed in response to the COVID-19 pandemic to help small businesses. The ERTC provided a tax credit to employers who retain employees and pay wages during the pandemic.
The ERTC was designed as a temporary measure to help employers keep employees on their payroll during the pandemic, and it was available from March 13, 2020, through December 31, 2020.
What Can You Claim?
One of the most critical questions on people's minds is what they can claim as wages. The IRS has uploaded guidelines suggesting that businesses with under 100 employees could claim salaries and benefits if their operations were affected. If your company was disrupted and faced a substantial decline over the period, you are eligible for the credits.
Eligible employers could claim a credit against their Social Security payroll tax. The credit was equal to 50% of the first $10,000 in wages paid to each employee, including health benefits. The credit was available to employers whose business was completely or partially suspended due to a COVID-19-related shutdown. It was also available to people who experienced a substantial drop in gross receipts when compared to the same quarter in the previous year.
In 2020, you could claim up to $5,000 per employee; in 2021, the number increased to $21,000 per employee. In total, you could potentially claim $26,000 in tax credits for every employee that you kept on board throughout the two years.
How To Claim Your ERTC In 2023?
Despite being two years since the program's start, the credits from ERTC are still claimable. However, claiming ERTC may be difficult, which is why you may need a consultant. First, you will need to fill in the 941-X form. The 941-X form is valid for up to three years since its filing.
Many people wonder if the claiming period expires for the ERTC credits. You will need to fill the form out as soon as possible since they can only be claimed till 2024. Don't miss the chance to save a lot of money by collecting your tax credits immediately.
Are Post-COVID Credits Still Available For ERTC?
Yes. The Employee Retention Tax Credit is still available. The ERTC was applicable to all wages and benefits that were given to employees between March and September 2020. Many people don't know this, but you can still claim your COVID credits.
Most businesses can still send in their applications to claim their tax credits. Remember that companies have till April 15, 2024, to claim their tax breaks. We recommend you get in contact with your financial advisors immediately and claim your benefits.
Who Should You Contact To Claim Your ERTC?
If you run a small business, claiming your ERTC may be challenging because of the paperwork. We recommend you make the process easier by opting for The Platinum Group’s Services. The group goes above and beyond to deliver its clients the best service, so you’re bound to have a good experience with them.
Claiming your tax credits has never been easier. All you have to do is schedule a meeting with one of its experts, and they'll do all the work. Furthermore, they're offering significant relief to small business owners with no upfront fees!
The deadline to claim your credits is approaching fast, so don't waste any more time and contact TPG today; Just call 909.724.4401!
Also, visit our ERTC webpage to receive a free consultation with one of our experts, zero commitment, zero strings attached, and zero fees!