How Can Businesses Align Strategic Planning With ERTC Funds?

November 24, 2023
Dayes Law Firm

It’s no secret that a financial boost can help your company meet its strategic goals. Thanks to the Employee Retention Tax Credit (ERTC), you can apply for a refundable tax credit of up to $26,000 for each employee if you are a qualified business and were affected by the COVID-19 pandemic. This refund can mean a much-needed influx of funds to meet your short-term cash needs or long-term organizational goals.

Just like with any other area of business, careful planning is important when claiming tax credits. ERTC strategic planning can help you align your overall business objectives with your ERTC funds. 

Here is how tax credit planning for the ERTC can align with your organizational strategic plan.

ERTC Eligibility Requirements

Whether your company qualifies as one of the essential businesses or a recovery startup business, claiming your ERTC refund may help move your organization forward. The first step is to see whether your company is eligible for the credit. While the exact ERTC regulations and requirements are complex, they involve the two primary criteria below:

  1. Substantial Revenue Decline: You must show a significant reduction in gross receipts for each quarter of 2020 and 2021 for which you want to claim the credit. The percentage depends on the year and quarter of your ERTC claim.
  2. Business Operation Suspension: Your company must have experienced a complete or partial shutdown due to a COVID-19-related government order.

There are many rumors, misconceptions, and even scams when it comes to ERTC eligibility, so take extra care to make sure your business meets the requirements.

How ERTC Strategic Planning Benefits Your Business

When done carefully and correctly, ERTC planning can help your business do the following:

1. Determine Credit Eligibility

You can’t plan to use money that you are not qualified to claim. That’s why the first step of any tax credit strategic planning must include a proper determination of eligibility. If you make any mistakes during this phase of your claim, you may risk processing delays and even having to return the credit plus interest and penalties.

2. Maximize Tax Credit Amount

The proper planning and professional advice can help you take full advantage of the credit legally available to you. Knowing what you’re entitled to, and applying for the entire amount, can help the rest of your strategic plan flow more smoothly.

3. Improve Cash Flow

Your business may experience seasonal fluctuations, or you may find yourself still impacted in the aftermath of the pandemic. Claiming your ERTC funds can enable you to stay afloat during a downturn or invest extra money in more forward-looking initiatives.

4. Enable Employee Retention

The whole idea behind the ERTC program was to help employers hold onto their workers during the COVID-19 pandemic. It may go without saying that implementing your strategic plan is a lot easier when you know how many people will be on your team. In addition, avoiding layoffs improves employee morale and team productivity.

Legal Help With ERTC Claims at Dayes Law Firm

As you approach ERTC strategic planning, working with an experienced team means having advice on ensuring compliance with complex tax regulations, changing government requirements, and proper claim documentation. This can help your business follow regulations, file on time, and avoid any red flags or claim denials due to issues with your application.

At Dayes Law Firm, we offer free consultations to businesses applying for the ERTC, and we can answer your tax credit questions and help you understand if you are eligible. Call us today at 800-503-2000 to meet with one of our ERTC attorneys.