If you run a business, you know disasters can strike when you least expect them. For instance, a key employee could quit right before a looming project deadline, or a tornado could destroy your office in the blink of an eye. If not properly handled, such disasters could shutter your business virtually overnight. The Employee Retention Tax Credit (ERTC) can help you prepare for events like these.
Learn about ERTC emergency preparedness and how to use the money from this credit to be ready for unforeseen events that come your way.
The ERTC Can Provide Cash for a Rainy Day
When we say the ERTC can help you prepare for a rainy day, we mean that literally. Natural disasters are a threat no matter where your business is, and it only takes one serious storm to damage your office or even wipe it off the map.
The ERTC can help your business recover after a disaster. You can use it to buy generators, hire a cleanup crew, or rent temporary office space to keep things running while you rebuild. Doing these things could help keep your business afloat during a crisis.
You Can Use the Credit To Hire More Staff
Is there anything worse than losing an employee (or more than one) when it’s crunch time at your business? Depending on how many workers you have, you could be in big trouble if several of them leave at once. Let ERTC emergency preparedness come to the rescue!
The ERTC gives you cash you can use to hire more employees, helping you pull through if you lose a worker or two. You might also want to consider using the credit to beef up your benefits package, which will attract more employees.
How Much Is the ERTC Worth, and Are You Eligible?
ERTC emergency preparedness can keep your business running smoothly in a crisis, but how much is the credit worth? That depends on whether you want to claim the credit for 2020 or 2021.
You can claim a credit for qualified wages paid up to:
- $5,000 per employee for 2020
- $7,000 per employee per quarter for 2021 (you can claim the credit for the first three quarters of the year only)
Qualified wages include all money paid to employees and any health insurance premiums you paid for them. For 2020, you may claim 50% of wages paid, up to $10,000. For 2021, you may claim 70% of wages, up to $10,000 per quarter.
You qualify for the credit as long as you meet one of these requirements:
- You had to shut down at least partially because of a government mandate limiting travel, group meetings, or commerce
- Your business had a major drop in gross receipts (at least 20% for 2021 and at least 80% for 2020)
How To Claim the ERTC
The IRS dictates no specific application for the ERTC. To claim the credit, you must file IRS Form 941-X, Adjusted Employer’s Quarterly Federal Tax Return or Claim for Refund.
It typically takes six to eight weeks for the IRS to send your credit, but you may have to wait a few months or more because of delays.
Call Dayes Law Firm If You Need Help With the ERTC
Coming up with an ERTC emergency preparedness plan is one of the smartest things you can do for your business. If you haven’t claimed the ERTC and aren’t sure whether you’re eligible, reach out to Dayes Law Firm at (866) 567-4510.