Employee Retention Tax Credit
Are you wondering if you qualify for Employee Retention Tax Credit? Make sure you are taking advantage of this tax relief and know how to claim it.
What Is The Employee Retention Tax Credit?
The CARES Act’s Employee Retention Tax Credit (ERTC) is a fully refundable payroll tax credit. The Consolidated Appropriations Act in December 2020 and the American Rescue Plan Act in March 2021 finalized game-changing updates to the ERTC.
The Employee Retention Tax Credit, which was recently expanded and extended, encourages businesses to keep employees on their payroll. It is worth up to $5,000 per employee per quarter in 2020 and up to $7,000 per employee per quarter in 2021. Furthermore, under the recovery startup provision, small businesses can claim up to $100,000 in the third and fourth quarters of 2021.
Do You Qualify for the ERTC?
Choosing an experienced company to help you identify where you can make tax savings and claim any initiatives such as the ERTC is the easier way to discover if you are eligible to apply for the Employee Retention Tax Credit.
There are three ways to qualify for ERTC;
- A 20% (or more) drop in quarterly revenue comparing 2019 to 2021.
- Full or partial government shutdown, as well as key vendors and suppliers.
- Started a new trade or business with average revenue of $1 million as a recovery startup.
It is important to remember that you can retrospectively apply for ERC for past Quarters. Indicators that you apply for ERTC also include;
- If you began a new trade or business after February 15, 2020, and
- You have average annual gross receipts of no more than $1 million for 2018-2020.
How Much is the Employee Retention Credit?
The Employee Retention Credit (ERC) is as follows;
- 2020 – ERC is worth up to $5,000 per employee per year.
- 2021 – ERC now worth up to $7,000 per employee per quarter.
- Recovery StartUp – Capped at $100,000 claimed in Q3/Q4 2021
Complexities of Claiming Employer Retention Tax Credit
Have you received different tax credit relief for employees (like PPP) and are you claiming a tax credit already? You mustn’t claim multiple tax credits in the same wage and that employees are full-time, not full-time equivalents.
Let our experts take the hard work out of making sure you are eligible for ERTC and that you aren’t falling foul of the guidelines around cleaning different tax credits. Safeguarding your access to these payments is vital for your business. Getting expert advice and assistance from our qualified professionals is the easiest way to make sure you meet eligibility requirements, provide detailed documentation, and optimize your credit.
Ready To Apply for Your Employee Retention Tax Credit?
Contact us today to see how your eligibility looks for claiming this tax credit. Make sure you are aware of your responsibilities in providing accurate information to determine your eligibility by working with our specialists to discuss your business growth and opportunities as the economy rebuilds and you look to get your business back on its feet.