ERTC and PPP Loans: Working Together to Benefit Your Small Business
The Employee Retention Tax Credit (ERTC) and Paycheck Protection Program (PPP) loans are two important resources that were designed to assist small businesses that were impacted by the COVID-19 pandemic. These programs were meant to help businesses retain their employees and keep their doors open during difficult times. There is a misconception that business that received Ppp loans in the past are not eligible for the ERTC, however this not the case. These two programs, the ERTC and PPP loans, can actually work together to benefit your business.
The ERTC is a refundable tax credit. This credit is available to employers that kept theirW-2 employees on payroll during the pandemic. The maximum credit available is $26,000 per W-2 employee. This credit is available to help businesses that were forced to close or limit operations due to the government-mandated restrictions related to COVID-19.
PPP loans, on the other hand, were designed to help small businesses cover both the cost of payroll and other expenses. These loans were created to be fully forgiven, but only if the funds were used for eligible expenses and if certain additional conditions were met. Examples of valid uses for PPP loan funds included employees' salaries, rent, utilities, and more.
The ERTC and PPP loans can work together to provide significant benefits for small businesses. A business that has received a PPP loan can also potentially claim the ERTC for wages paid to ther W-2 employees during the covered period. This can can be a great help to businesses that were impacted by the pandemicn should determine whether they qualify for and claim the maximum ertc credit even if they have already received a PP loan
Small business owners that were impacted by the COVID-19 pandemic should determine whether they qualify for and claim their maximum ERTC credit, even if they have already received a PPP loan. These two programs were designed by the government to help businesses survive and recover after the financial difficulties caused by the pandemic. The ERTC and PPP loan can work together to greatly benefit your small business.
If you need help to determine whether or not your business qualifies for the ERTC credit, we can help! DAC Funds Me has partnered with a group of professional CPAs that specialize in this type of credit and are ready to help with zero upfront retainer fees. Please click the button below to learn more or to start the qualification process.