Employee Retention Tax Credit
The isolated outbreak became a pandemic, and employees were the ones that dented at a dramatic scale. There were businesses that shut down completely or have reduced their operations, due to which they have suffered loss and eventually, this all impacted employees. Many employees were either jobless or suffered from low pay. CARES Act, as per government Coronavirus Aid, Relief and Economic Security, a financial assistance tool, encouraged employers to keep their employees on payroll during economic hardship with a tax credit of 50% upto 10,000 in wages.
The ideal goal for Employee Retention Credit was to reduce business tax liability and support employees during tough times. For example, if a full-time employee paid $10,000 in qualified wages, they were eligible for an Employee Retention Credit of $5,000, which is half or 50% for that fiscal quarter.
Initially, it was introduced with 50% of qualified employee wages with a limitation of $10,000 for any employee and maximum credit of $5,000 for wages from March 13,2020, to December 31, 2021. Since 2021 it has been pushed a little more and extended with a 70% tax credit for full-time employees under the Consolidated Appropriations Act (CAA), which became $7000 for the same employee of $10,000.
Who is eligible for Employee Retention Credit?
Those who fit into the employee retention credit shed are private sector or tax-exempt organisations that have either –
- partially or fully suspended their operations during that period due to government restrictions imposed.
- That business who have experienced steep gross receipts during the calendar quarter.
If your business wasn’t tangible in 2019, you could use the corresponding quarter exemption to show the revenue reduction between 2020 and 2021 and qualify for Employee Retention Tax Credit.
Over the time and claws imposed by governments, ERTC could be challenging to understand and confusing to track. There are nuances that are evaluated before knowing the eligibility of exemption and applying for it. At SNTCPA, we help you understand and file ERTC as per norms and amendments to help businesses gain their qualified right.
At SNTCPA, our team has been fully focused on getting relief for funding for business owners. A thorough and comprehensive approach from our experts and skilful team helps you evaluate and document companies’ ERC credits. Our technical leader would assist you throughout each phase to claim and sustain pending ERC credits. We have a mission to help businesses maintain and provide the support they qualify for. Beyond employee management taxes, we help you manage payroll, taxes, bookkeeping and more.
Get in touch with us to know more about how much your business and employee qualified and what other benefits you could receive.
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