How Can the Employee Retention Tax Credit Fuel Staff Development?
In 2020, COVID-19 hit everyone hard, but business owners had unique struggles. If you were running a business in 2020 and 2021, you remember how difficult it was to navigate these challenges. With the introduction of the Employee Retention Tax Credit (ERTC), the government provided businesses with aid to keep many afloat.
Now that those tumultuous times have calmed, how can you continue to benefit from the ERTC? You may not think the ERTC and staff development are related, but you must know how to utilize your ERTC benefits. When claiming the credit, you must determine how to use your funds. One strategy is to use them for staff development.
What Is the ERTC?
The Employee Retention Tax Credit (ERTC) is a refundable tax credit for businesses that kept employees on their payrolls in 2020 and 2021 despite the financial hardship brought on by COVID-19. To help keep businesses open and people employed, the government introduced the ERTC through the Coronavirus Aid, Relief, and Economic Security (CARES) Act.
To qualify for the ERTC, you must have either seen a significant decline in gross receipts or experienced a suspension of regular operations due to a government mandate. Eligible employers can collect 50% of up to $10,000 of employee wages paid in 2020 and 70% of the same in 2021.
The Importance of Staff Development
Staff development is vital in every workplace across industries. Staff development gives your employees the tools they need to grow, which helps your business thrive. Not engaging with your employees past the hiring stage and the occasional performance review can harm workplace morale, leading to excessive turnover.
Professional development helps you retain your finest talent while encouraging others to improve. Employees want opportunities and education. By providing quality staff development, you keep your employees engaged, informed about industry trends and practices, and invested in business outcomes.
You might think: This is all great, but how are the ERTC and staff development related?
How the ERTC Fuels Staff Development
When you claim the ERTC, you will collect your refund anywhere from six months to a year later. The amount you receive will depend on how many employees your business or tax-exempt organization retained in 2020 and 2021, the qualified wages paid, and the size of your business.
Use Extra Funds for Staff Development
When you finally receive that refund, you have plenty of options for distributing the money. One of the more productive uses is putting it toward staff development. You can invest funds in workshops, guest speakers, or new educational programs.
Increase Employee Morale
Claiming the ERTC allows you to continue paying employees fairly and, in some cases, provide healthcare. If you are a small business, your qualified wages for the ERTC include healthcare costs for your employees.
To qualify as a small business, you must have had 100 or fewer employees in 2020 and 500 or fewer in 2021. Meeting your employees’ needs sets a strong foundation for the future.
Expand Your Staff
Depending on the size of your refund, you may have enough to hire more people. Adding to your team gives employees more time to focus on the quality of each task. When it comes to staff development, expanding your staff gives everyone room to grow.
Use the ERTC To Fuel Staff Development with Help from Experienced Tax Attorneys
The ERTC and staff development can take your business to the next level. Put your business’s growth and development first by filing for the ERTC. At Dayes Law Firm, we’ve helped hundreds of businesses file for the ERTC. You could be next. Don’t take on this complex process alone. With the IRS putting additional focus on the quality of ERTC claims, you may benefit from experienced help more than ever. Call 866-567-4510 today for a free consultation.