There is a seemingly endless list of reasons why business owners who qualify to claim the Employee Retention Tax Credit (ERTC/ERC) for their business should do so. One of those reasons is that it could impact retention of your employees, or even help you to avoid layoffs at your company.
How Forgoing Filing an ERTC Claim Can Impact Employee Retention
The Employee Retention Tax Credit is a refundable tax credit the federal government introduced through the Coronavirus Aid, Relief, and Economic Security (CARES) Act in 2020. It incentivized eligible businesses to keep employees on their payroll despite major financial setbacks due to the COVID-19 pandemic.
Not only did the ERTC encourage and reward employers who kept their staff during a tough economic period, but it can also impact employee retention now. By bringing in an influx of cash to your business – with the potential to claim up to $26,000 per employee – you can reassure your current staff of your business’s financial standing and possibly motivate them to stick around.
You can also use Employee Retention Tax Credit funds for different needs that can benefit your employees. You could use the money to offer bonuses or better benefits packages. You could also use the money to update equipment, which your employees are sure to appreciate. Any of those possibilities could improve employee retention.
On the flip side, forgoing filing an ERTC claim could impact employee retention, especially for small businesses, because you may lose out on being able to do those aforementioned things to improve the experience of your employees. If your employees sense that your business is not in great financial shape, for instance, and you don’t apply for the ERTC to try to access those funds, they may get nervous and jump ship, so to speak.
As an employer, when it comes to keeping your staff members around, not claiming the ERTC when you’re eligible to do so could also impact your ability to avoid layoffs. Having the extra money the Employee Retention Tax Credit can provide may result in an opportunity to keep employees on payroll who you might have otherwise needed to let go, especially if you’re a small business owner and money is tight.
The bottom line is, if you’re eligible to claim the ERTC for your business, there’s really no reason not to do it. It can improve your business and the experience your employees have working there, and if you worked to keep them on staff during the height of the COVID-19 pandemic and its massive economic impact, you’ve earned that money. To simplify the ERTC claim process, you might want to consider bringing on a tax professional for assistance.
Working with Dayes Law Firm
Here at Dayes Law Firm, for example, we can help you determine whether or not your business is qualified to claim the Employee Retention Tax Credit and, if it is, guide you through the process of applying for it. Our team can help you with all the documentation necessary to claim the ERTC and work with you every step of the way as you claim this important tax credit.
Our clients have already received over $25 million in funds thanks to Employee Retention Tax Credit claims, and we’d be happy to help you, too. Our firm offers a free, no-obligation consultation to answer any questions you may have or to discuss any concerns about the claims process.
Please give us a call if you’d like to discuss how the ERTC can help your business in areas like employee retention. Contact us today to learn more!