What Business Owners Should Know About the ERTC
The Employee Retention Tax Credit (ERTC) was implemented due to the COVID-19 pandemic. Businesses were forced to shut down their operations during the height of it. As a result, Congress passed programs to provide financial assistance to companies. In summary, the ERTC is a refundable payroll tax credit that businesses can claim on qualified wages paid to their employees.
Your business may qualify for this credit and could receive up to $26,000 per employee if you experienced considerable setbacks during the peak of the pandemic while continuing to keep your staff on your payroll. The ERTC gives entitled employers payroll tax credits for wages and health insurance paid to employees. Depending on various factors including employee cap and qualified wages, certain business owners are entitled to a percentage of qualified wages an employer paid to employees during the qualifying period.
In order to qualify, you must be able to demonstrate that your business was adversely affected in one or more of the following ways. Your business experienced a partial or total shutdown during 2020 or 2021 Your business must have had limitations to commerce, travel or group meetings. Or your business suffered a significant decline in gross receipts.
The ERTC is not considered taxable income for employees. That’s good news for employees as they do not have to pay any additional taxes on wages that are covered by the ERTC. For employers, ERTC is treated as a business expense, which can be used to offset taxes owed. The ERTC is a refund in the form of a grant and can return up to $26,000 per employee depending on wages, healthcare and other personnel expenses business owners have already paid. The ERTC is available to all businesses, regardless of size or industry. It is treated as a reimbursement in the form of employer credits.
Even though the program ended in 2021, businesses still have time to claim the ERTC. Since the tax laws around the ERTC have changed, it can make determining eligibility confusing for many business owners. In addition, it’s also quite difficult to figure out which wages qualify and which ones do not. There’s even a chance that you accidentally fill out the IRS forms incorrectly, which can delay the entire process.
Why struggle with applying for the ERTC on your own when Start Fresh Tax Relief can guide you through the process. Our professional team will provide you with the best chance at obtaining the highest potential tax credit refund. You survived an extremely challenging time while being loyal to your employees. Your business deserves this well-earned incentive for protecting the welfare of your employees while being greatly impacted by the pandemic.