What Financial Benefits Does the ERTC Offer New Businesses?

November 15, 2023
Dayes Law Firm

The Employee Retention Tax Credit (ERTC/ERC) is a very important program for a lot of businesses that struggled during the COVID-19 pandemic. But many eligible employers haven’t yet applied for it! Considering the amazing financial benefits, if your business qualifies to apply for the ERTC and you haven’t done so yet, you should determine sooner rather than later whether you should get assistance to claim the credit. New businesses that may need a leg up could particularly benefit from the ERTC.

Financial Benefits of the ERTC to New Businesses

The ERTC is a refundable payroll tax credit certain businesses can claim on qualified wages paid to their employees if they kept staff on their payroll in spite of major financial setbacks during the height of the COVID-19 pandemic in 2020 and 2021.

If you’re the owner of a fairly new business that existed during that time period, you might qualify to claim the credit. To qualify for the ERTC, your business must have experienced either a full or partial shutdown of operations or a significant decline in gross revenue. These qualifications include a 50 percent loss in revenue for 2020 and a 20 percent loss per quarter for 2021 when compared to the same quarter in 2019.

If you qualify, even as a relatively new business, the financial benefits of the ERTC can be almost unbelievable. In 2020, the maximum tax credit for an employer who qualifies for the ERTC is 50 percent of the first $10,000 in qualified wages – up to $5,000 per employee, according to Experian

For 2021, the credit is equal to 70 percent of the first $10,000 in qualified wages per quarter, or up to $7,000 per employee per quarter. That means an employer who qualifies for the ERTC may get a maximum credit of $7,000 per quarter per employee, for an incredible total of $21,000 for 2021.

In total? The maximum amount of the ERTC a business can claim per employee is $26,000 – $5,000 per employee in 2020 and $21,000 per employee in 2021. That’s the sort of money that could make a real difference for a struggling new business. 

What Can the ERTC Be Used For?

The Employee Retention Tax Credit can be a huge financial benefit to a small business because the funds can be used for a lot of things.

You could use the money you claim from the ERTC on everything from hiring new employees, to investing in current employees, to funding new projects, and more. Maybe there’s a big purchase you’ve been meaning to make to take your business to the next level and you haven’t yet been able to do it; with your ERTC refund, you can!

A lot of new businesses also have a lot of debt. The money you see from the ERTC can be used for that too! If you managed to scrape by through COVID as the owner of a small, new business, you certainly deserve a reward for doing so, and the ERTC may still be available for you to claim. 

Call Dayes Law Firm for ERTC Assistance

There are, however, some particulars about the Employee Retention Tax Credit that you need to know before you get started, like deadlines and when the current moratorium on applications will end. Or, maybe you’ve just decided you need a little help because you’ve got a lot on your plate as a small business owner. That’s where Dayes Law Firm comes in. 

Dayes Law Firm can help you apply for the ERTC and answer any questions you may have about the tax credit. We offer a free, no-obligation consultation of your situation to make sure you qualify to claim the Employee Retention Tax Credit. 

Please don’t hesitate to contact us to learn more today! You are under no obligation to work with us after the initial evaluation, but we think we can prove why we are the right team to help you and your business with the ERTC. Call today for your free consultation!