If you’re a business owner, you know that retaining your best employees is key to your success. That’s why the employee retention tax credit was created! In this blog post, we will discuss the employee retention tax credit, who qualifies for it, and how to claim it. Keep reading to learn more!
What is an Employee retention tax credit?
The employee retention tax credit is a tax credit that is available to businesses that are experiencing economic hardship due to the COVID-19 pandemic. To be eligible for the credit, companies must have experienced a decrease in gross receipts of at least 50% compared to the same quarter in the prior year. Businesses eligible for the credit can claim it on wages paid to employees after March 12, 2020, and before January 1, 2021.
Who qualifies for the credit?
To qualify for the employee retention tax credit, businesses must have experienced a decrease in gross receipts of at least 50% compared to the same quarter in the prior year. Additionally, companies must have been required to suspend operations due to a government order related to the COVID-19 pandemic or have experienced a decrease in gross receipts for more than two consecutive quarters.
How to claim the credit?
Businesses eligible for the employee retention tax credit can claim it on wages paid to employees after March 12, 2020, and before January 1, 2021. The credit can be claimed on Form 941, Employer’s Quarterly Federal Tax Return.
The employee retention tax credit is a valuable tool for businesses impacted by the COVID-19 pandemic. If you think your business may qualify for the credit, we encourage you to speak with your tax advisor to discuss your specific situation.
How Much Time Left for Claiming ERTC?
The Employee Retention Tax Credit (ERTC) is a payroll tax credit for businesses impacted by the COVID-19 pandemic. The credit can be claimed on wages paid to employees after March 12, 2020, and before January 1, 2021. businesses must have experienced a decrease in gross receipts of at least 50% compared to the same quarter in the prior year.
Additionally, businesses must have been required to suspend operations due to a government order related to the COVID-19 pandemic or have experienced a decrease in gross receipts for more than two consecutive quarters. If your business meets these criteria, you may be eligible for the credit.
However, time is running out to claim the credit, so we encourage you to discuss your situation with your tax advisor as soon as possible.
The Bottom Line
The employee retention tax credit is a valuable tool for businesses impacted by the COVID-19 pandemic. If your business meets the eligibility criteria, we encourage you to discuss your situation with your tax advisor as soon as possible. Don’t wait too long, though, as the credit is only available for wages paid before January 1, 2021.