Can the ERTC Help a Business Survive an Economic Downturn?
Even when analysts say the economy is doing well, reality often paints a different picture. Rising prices for equipment, supplies, and office space have hit business owners hard nationwide. If your business is struggling, you can use ERTC benefits to help you pull through a downturn.
The ERTC, or Employee Retention Tax Credit, provides tax relief for employers who suffered financially during the COVID-19 pandemic. It is still possible to apply for the credit retroactively.
How You Can Use ERTC Benefits To Keep Your Business Afloat
Could your business use a helping hand? Learn about a few ERTC advantages and employee retention incentives below.
Retain and Hire Employees
Thousands of employees left the workforce during the pandemic, and even now, many employers struggle to retain and find workers. Part of the reason why is that they can’t afford to pay employees an attractive wage or salary.
With the minimum wage rising in several states and industries, employers face intense pressure to keep up and remain competitive. If you’ve accepted the ERTC, you can use those HR tax benefits to keep your valuable employees and hire new ones.
In addition to boosting employee pay, you could also use the credit to build out your benefits program. Offering appealing perks such as tuition reimbursement, discounted mental health care, and free childcare is a surefire way to attract fresh talent.
Enjoy Workforce Tax Savings
The ERTC is a refundable tax credit that provides up to $26,000 per employee. If you have a large business, your tax savings can be significant.
The amount that you qualify for depends on how many full-time employees you have and how much in qualified wages you paid for each. This also includes health insurance costs that you paid for employees.
Purchase New Equipment
When a critical piece of equipment fails, it can spell disaster for business owners. If that equipment costs thousands and you can’t afford to replace it, you may have to shutter your business permanently.
ERTC benefits provide cash for such emergencies. You can use your benefits to replace outdated equipment with newer, more reliable models.
Pay Bills and Debts
Mounting bills and debts can make it impossible for a business to stay afloat. If you’re close to draining your accounts and maxing out your credit cards to pay the bills, the ERTC can provide much-needed relief.
Does Your Business Qualify for Tax Credit Benefits?
Haven’t claimed the ERTC yet and want to know if you qualify? You’ll need to meet one of two requirements:
- You had a significant drop in gross receipts (at least 50% compared to the same calendar quarter of the prior year for 2020 and a drop of at least 20% for 2021)
- Your business partially or fully closed because of a government order limiting travel, commerce, or group meetings
If you meet one of these requirements, you can apply for the credit using Form 941-X: Adjusted Employer’s Quarterly Federal Tax Return or Claim for Refund. You will need to submit the form by mail, as the IRS doesn’t accept online filing at this time. Depending on IRS backlogs, it could take eight weeks or more for your refund to arrive.
Trusted ERTC Guidance From Dayes Law Firm
If your business is going through tough financial times and you want to know if you qualify for the ERTC, reach out to Dayes Law Firm. Our attorneys can explain the qualification requirements in more detail and help you apply for the credit if you’re eligible.