How Can the Employee Retention Credit Benefit Your Small Business?

The employee retention credit (ERC) is a tax credit that was established as part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act. The purpose of the ERC is to help businesses that have b

One of the biggest benefits of the employee retention credit is that it can help businesses keep their employees on the payroll. The ERC is a refundable credit, meaning that it can be claimed even if the business has no tax liability. This can be especially beneficial for small businesses that may be struggling to make ends meet during the pandemic. By being able to claim the credit, these businesses can keep their employees on the payroll and avoid layoffs.

Another benefit of the employee retention credit is that it can help businesses save money on taxes. The credit is equal to 50% of the qualified wages that a business pays to its employees during the covered period. This can be a significant savings for businesses that have been impacted by the pandemic and are struggling financially.

The employee retention credit is also a flexible credit. It can be claimed for any quarter in which the business has experienced a significant decline in gross receipts. This means that businesses that have been impacted by the pandemic at different times can still qualify for the credit. Additionally, the credit can be claimed for qualified wages paid to employees, regardless of whether they are full-time or part-time.

The employee retention credit is also available to a wide range of businesses. It can be claimed by businesses of all sizes, including sole proprietors, partnerships, corporations, and tax-exempt organizations. This means that many businesses that have been impacted by the pandemic can take advantage of the credit.

In order to claim the employee retention credit, businesses must have experienced a significant decline in gross receipts. The amount of the credit is determined by the amount of qualified wages that the business pays to its employees during the covered period. The credit can be claimed for wages paid to employees, regardless of whether they are full-time or part-time.

It is also important to note that this article is written with the knowledge cut off at 2021, and the laws and regulations regarding employee retention credit may change over time. It's recommended to consult with a tax professional or the IRS for the most up-to-date information.

Whether you are located nearby in Metro Atlanta GA or anywhere across the States, we can connect you with professional licensed CPAs that specialize in Maximizing ERC credits that are ready to help! Best of all, there is no retainer fee. You pay only if and after you receive your credit. Click the button below to learn more or get qualified today!