The early months of the COVID-19 pandemic were rough on everyone. But small business owners had it especially hard due to government restrictions and shutdowns that limited business operations and the ability to serve customers. As the world is slowly getting back to “normal,” some employers may need extra economic assistance to bounce back – and the Employee Retention Tax Credit may be able to help.
What is the ERTC?
The ERTC is short for the Employee Retention Tax Credit and is sometimes referred to as the ERC. If your business experienced fully or partially suspended operations due to government orders during the COVID-19 pandemic, or if it saw a significant decline in gross receipts between March 2020 and December 2021 when compared to the same quarter in 2019, it may be eligible to claim the ERTC.
The ERTC is available for wages paid between March 13, 2020, and December 31, 2021. (Although the Infrastructure Investment and Jobs Act retroactively ended the Employee Retention Tax Credit as of September 30, 2021, Recovery Startup Businesses may still be able to claim the ERTC for wages paid after June 30, 2021, and before January 1, 2022.)
Can the ERTC Help Businesses Recover from the Financial Impact of COVID-19?
There are many ways in which the Employee Retention Tax Credit may benefit your business, and help businesses in general recover from the impacts of the coronavirus pandemic.
The credit maximum for the ERTC per employee is $7,000 for each employee per quarter in 2021, which equals $21,000 in total. When added to the maximum credit of $5,000 per employee in 2020, you could potentially claim up to $26,000 per employee for your business.
That amount of money could go a long way toward helping your business in the wake of economic uncertainties stemming from the COVID-19 pandemic.
For instance, you could hire new employees to strengthen your staff or give raises or bonuses to staff members who stuck with you through thick and thin. While the ERTC is meant to help businesses that retained employees in 2020 and 2021, it could also help with employee retention now by allowing you to offer more incentives to your staff!
Speaking of incentives, you could use your ERTC refund on new benefits for staff members, or to fund new projects or departments within your business. It could also be used on much-needed new equipment to make your business run more smoothly and efficiently.
As a business owner, you could also take care of some debt incurred during the financial downturn due to COVID-19 and get your business out of debt, or at least get it headed in the right direction. If you’re lucky enough to not have much debt to worry about, you could instead choose to save or invest some of your ERTC money to act as a rainy day fund or for later projects.
Your Employee Retention Tax Credit refund can be used for basically any business expenses – it all comes down to how you wish to allocate the funds. This makes it especially attractive as a program that could help your business recover from the financial impact of COVID-19.
How the ERTC Team at Dayes Law Firm Can Help
The tax professionals at Dayes Law Firm can help you claim the Employee Retention Tax Credit for your business. We have already helped other businesses file for millions in ERTC refunds so far and we work with new businesses all the time.
Contact us today for a free consultation with a member of our team to discuss how the Employee Retention Tax Credit may be able to help your company recover from the economic effects of the pandemic.