It’s no surprise that the Covid-19 pandemic changed the way most businesses operate. From adjustments to staffing and labor, to remote workplaces and more, businesses have had to make financial decisions to maintain the health of their business. The Employee Retention Credit (ERC) is an opportunity to receive a refundable tax credit for businesses that paid employees while shut down due to the COVID-19 pandemic, or businesses that had a significant decline in gross receipts from March 13, 2020 to Dec. 31, 2021. Read more about the requirements and how to take advantage of this credit.
Many restaurants, hotels, hospitality and beauty-related businesses will qualify for the tax credit due to the government-ordered shut downs of 2020. Government-related businesses like some medical or hospital institutions, credit unions and universities may also qualify. The quarterly credit differs depending on the size of the business, and employers with 500 or fewer full time employees can apply the ERC towards all qualified wages, while employers with 500 or more full-time employees can apply the ERC towards qualified wages that were paid to employees who were not working. The reasons for not working can be because of suspended operations or a decline in receipts. If you received a PPP loan, you may also qualify for the ERC, however it can only be applied toward wages that are not forgiven, or expected to be forgiven.
If your business was not affected by the government-ordered shut downs, but still experienced declines in Revenue during 2020 and 2021 (Q1 & Q2), you may still qualify for the ERC. Contact us today with questions or to see if the ERC applies to your business!