How Companies Can Use the ERTC to Bolster Childcare Benefits

November 26, 2023
Dayes Law Firm

The COVID-19 pandemic had a major impact on employers and employees alike. Employers may have had to close their doors for a certain amount of time; employees may have struggled to maintain jobs, take care of their families, and more.

The pandemic put a number of concerns at the forefront of the public’s mind — including childcare. While employees can return to the office, that concern hasn’t left, and many businesses have started incorporating childcare into their benefits package.

The team at Dayes Law Firm can help you discover how to improve workplace satisfaction by expanding your benefits package for employees with ERTC funds.

What Are Childcare Benefits?

Childcare benefits allow employers to help cover the costs of childcare. For example, perhaps an employee needs to pay for daycare now that they’re back in the office. A benefits package could reimburse the employee for childcare costs.

Childcare benefits may also take other forms; for example, you could offer on-site childcare services, or you could make sure that your employees have paid family leave to spend time with their children.

Why Offer Childcare Benefits To Employees?

Employers opt to offer childcare benefits for many reasons, including the following.

Keep Employees Longer

Finding new employees can be difficult. You’ll have to search for new talent, take them through the hiring process, and then train them. This can be expensive and time-consuming, so it’s generally preferable to keep your current staff.

Good benefits can keep employees around longer. Should you offer childcare benefits, your staff may be more likely to stay to retain them.

Boost Your Bottom Line

Spending extra money on comprehensive benefits can help improve employee satisfaction, which means they’re likely to work harder and stay around longer. In return, you can reduce the expense of finding new hires and enjoy extra earnings.

Enhance Productivity

Stressed employees may find themselves exhausted and dissatisfied with their jobs, leading to reduced productivity. Childcare and financial worries, in particular, can be significant stressors. By providing childcare benefits, you can help reduce this stress, which means your employees will be able to put more effort into their work.

How the ERTC Can Help You Provide Childcare Benefits

To reduce the pandemic’s impact on businesses, Congress passed the Employee Retention Tax Credit as part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act. This payroll tax credit reimbursed eligible businesses that retained employees during 2020 and the first three quarters of 2021.

In order to qualify for the ERTC, an eligible employer must have either experienced:

  • A significant decline in gross receipts decline, or
  • A full or partial suspension of operations due to governmental orders in 2020 or the first three quarters of 2021

The ERTC refund is not directly taxable, though it may affect how many wages you pay. In addition, you can use this refundable credit for anything that supports your business — including providing childcare benefits.

You can use the funds to:

  • Create an on-site childcare program
  • Create a program to either reimburse employees for childcare or pay for it entirely
  • Assist with backup childcare services
  • Expand family and medical leave options

The ERTC and childcare benefits, and how they interact, can sometimes seem complicated; work with a qualified lawyer to learn more. 

Determine Your Eligibility With Help From Dayes Law Firm

At Dayes Law Firm, our goal is to help you understand the ERTC. We’ll help you determine how to claim the credit and discover how to utilize it for a childcare benefits package.

Learn more about the ERTC and childcare benefits. Call Dayes Law Firm at 800-503-2000 and request your consultation.