Can the ERTC Be Used to Support the Hiring of Veterans?

December 7, 2023
Dayes Law Firm

There is still some confusion among business owners about what the funds from the Employee Retention Tax Credit (ERTC/ERC) can actually be used for. Are there limitations on it, like there are for Paycheck Protection Program (PPP) loans? Can it be used for adding new members to your workforce – like in hiring veterans and other individuals?

Can the Employee Retention Tax Credit be Utilized to Hire Veterans?

The ERTC is a refundable payroll tax credit many businesses can claim on qualified wages paid to their employees if they kept staff on payroll despite major financial setbacks during the height of the COVID-19 pandemic in 2020 and 2021. It is generally available to employers that experienced either a full or partial shutdown of operations due to a governmental order related to COVID-19, or if a business experienced a decline in gross receipts in 2020 or 2021 compared to the same quarter in 2019.

Business owners could potentially see a substantial refund through the Employee Retention Tax Credit program. For tax year 2020, qualified employers can potentially get a maximum credit of $5,000 per employee. For 2021, the credit is equal to 70 percent of the first $10,000 in qualified wages per quarter, or up to $7,000 per employee per quarter. 

That means an employer who qualifies for the ERTC has the potential to receive a maximum credit of $7,000 per quarter per employee, or a total of $21,000, for 2021. The total maximum amount of the Employee Retention Tax Credit a business can claim per employee is $26,000. Now multiply that by the number of employees you can claim, and it can result in a tremendous refund amount for your business. 

The ERTC is not a loan and does not need to be paid back to the government, and it can be used for almost anything your business may need. For instance, you could use it for health insurance costs or other benefits for your employees. Or, you could use it to hire additional employees. 

And yes, the Employee Retention Tax Credit can even be used with some other tax credits. Businesses that hire veterans or individuals with disabilities can often claim the Work Opportunity Tax Credit (WOTC), and they can also apply for the ERTC.

However, you’ll want to be sure to follow all of the IRS’ rules when it comes to what wages you can claim and how to claim them without double dipping. In order to keep everything as accurate and straightforward as possible, you may want to consider working with a tax attorney on your ERTC application. 

Working with Dayes Law Firm 

To date, the Dayes Law Firm team has assisted businesses in filing for over $250 million in Employee Retention Tax Credit claims and our clients have already received over $25 million in ERTC funds. We have a proven record of success when it comes to helping businesses with the ERTC, and we’d be happy to help you and your business, too.

If you’re particularly interested in using the ERTC to support the hiring of veterans at your company, we may be able to advise you on how much you could expect in ERTC funds and what you could use the tax credit for. We can discuss any of your questions or concerns about the ERTC in a free, no-obligation consultation with a member of our team.
Our skilled tax professionals are ready to assist you with the Employee Retention Tax Credit. Please contact us today to learn more!