Learn more about eligibility for the Employee Retention Tax Credit (ERTC).
The Employee Retention Tax Credit (ERTC) might not be a brand new thing, but many business owners still have yet to hear of it and, as a result, have not taken advantage of it. Businesses can no longer pay wages to claim the ERTC, but they have until 2024 to look back at their payroll during the pandemic and retroactively claim the credit by filing an amended tax return. However, to do so your business must still meet the qualifications for this credit. This blog will share some simple things every business owner should know about the Employee Retention Tax Credit.
Employee Retention Tax Credit 101
The Employee Retention Tax Credit is a payroll tax credit that many employers are eligible for. This tax credit was created to help provide nonprofit and for-profit organizations with some relief during the COVID-19 pandemic. It is designed to be given to companies who kept employees on their payroll from March 13, 2020, to September 30, 2021. Businesses that are eligible for this credit can receive up to $5,000 per employee for 2020 and up to $21,000 per employee for 2021.
What Businesses Are Eligible?
To qualify for the Employee Retention Tax Credit, you need to fall into at least one of these two requirements:
- You were partially or fully suspended in your business operations due to COVID-19 restrictions or orders
- You experienced a notable decline in your gross receipts
One or both of those requirements must be valid for every quarter you ask for relief. For example, in 2020, your gross receipts for a calendar quarter would need to be 50% or less of the gross receipts for the same quarter in 2019.
Are You Eligible If You Got a PPP Loan or the FFCRA Credit?
One of the biggest concerns many businesses have about the Employee Retention Tax Credit is whether or not they’re ineligible for getting a PPP loan or claiming the FFCRA credit. While the ERC initially restricted you from also participating in the PPP, the restriction was eventually lifted. Even if you received a PPP loan, you are still eligible for the Employee Retention Tax Credit. However, you cannot claim the ERC and FFCRA credits for the same wages that you paid.
Work with the Right Partner at Malden Solutions
Malden Solutions has a wealth of expertise in providing employer insurance solutions, HR solutions, and individual insurance solutions to businesses both big and small. Our team of seasoned professionals can help you navigate the rapidly-changing world of insurance with ease. We partner with businesses and individuals throughout the country to provide our dedicated services for employee benefits but also work within our surrounding communities in Maryland, Northern Virginia, and Washington, D.C. Contact us today to learn more about how we can provide effective, dynamic solutions for your business. Stay connected with us on Twitter, Facebook, and LinkedIn.