ERTC: An Incentive for Investing in Employee Training

August 23, 2023
Dayes Law Firm

The Employee Retention Tax Credit (ERTC) is a major benefit savvy business owners can use to help their companies thrive. Reducing payroll expenses and eliminating debt are obvious choices for using your ERC refund, but you might also consider channeling some of the funds into other venues, like employee training. 

How the ERC Works

The Employee Retention Credit/Employee Retention Tax Credit (ERC/ERTC) allows eligible employers to claim $5,000 per employee for 2020 and $7,000 per employee per quarter for 2021. You may qualify for this credit if your business had to partially or fully suspend its operations due to government restrictions during the COVID-19 pandemic and/or if your company suffered a significant decline in gross receipts compared to 2019.

If you haven’t claimed the credit, you can do so retroactively for 2020 by April 15, 2024, and for 2021 by April 15, 2025. You must file Form 941-X (Quarterly Federal Tax Return or Claim for Refund). 

Why Use ERC Funds for Employee Training

After collecting the ERTC refund, you must decide how to use this money wisely to promote your business goals. There are many excellent reasons to direct part of your refund toward employee training. When your business invests in employee training and learning programs, it’s easier to:

  • Attract first-class talent. A company culture of professional advancement helps you target groups of high-caliber workers who prioritize growth and development and present your organization as an excellent place of employment.
  • Improve employee satisfaction. Meaningful learning and training that aligns with your company goals will keep employees more satisfied and engaged. 
  • Improve productivity. Targeted training makes your employees better professionals who are more motivated to go the extra mile for the company. Your organization will reap the direct benefits of valuing and investing in your employees. 
  • Boost employee loyalty. When your employees know your company offers opportunities to grow professionally, they’ll be likelier to keep their positions and stay loyal to the organization.
  • Nurture your business vision. Along with new products and cutting-edge technology, employee training will help your business stay ahead in a competitive market.

Other Strategic Ways To Use the ERTC

Employee training is just one way you can use the ERTC to benefit your employees and business. You can also use this tax incentive to invest in:

  • Employee health and wellness, including wider health insurance plans, wellness programs, mental well-being plans, burnout prevention, fitness plans, and more. 
  • Better work-life balance, like more paid vacation time and accommodations for flexible, family-friendly schedules.
  • Direct rewards like bonuses or extra contributions to your workers’ 401(k) plans. 
  • Strategic investments, like purchasing real estate to expand your office space, buying new equipment, developing new products, or even investing in a business acquisition.

Of course, you may need your ERTC return for more immediate financial needs, like eliminating or restructuring debt and building equity. You might also want to put some cash aside in an emergency fund your business can use during tough times. But employee training should rank high on your list of priorities when considering how to use this extra money. 

Dayes Law Firm: Helping Arizona Businesses Claim the ERC Tax Benefit

Are you looking into ERC and wondering whether your business qualifies for this credit? Preparing to file your amended tax returns but aren’t sure which wages are eligible? Contact Dayes Law Firm. Our experienced tax attorneys will guide you through the steps of claiming the ERTC for 2020 and 2021 within the soon-approaching deadlines.

Call (866) 875-1005 or contact us online for a free consultation with an expert ERTC tax lawyer.