Did your business keep employees on your payroll through the pandemic? You may be eligible for a tax credit from the Internal Revenue Service.
Businesses have been facing numerous hurdles and uncertainties. To provide support and stimulate economic recovery, the government has introduced the Employee Retention Credit (ERC). This credit aims to provide financial relief to businesses who were able to retain their employees during the COVID-19 pandemic.
The Employee Retention Credit (ERC), introduced under the CARES Act relief package during the initial stages of the COVID-19 pandemic, aimed to provide additional incentives for smaller businesses to retain their employees. Despite being overshadowed by the Payment Protection Program, the ERC serves as a valuable tool to encourage employee retention and bolster businesses during challenging times.
What is the Employee Retention Credit (ERC)? The Employee Retention Credit is a stimulus program designed to assist eligible businesses in retaining their employees. It is a refundable tax credit that businesses can claim on their federal payroll tax returns. The credit is intended to offset a portion of qualified wages paid to employees during specific periods, encouraging businesses to retain their workforce and maintain their operations.
Why is the government offering Employee Retention Credit? The government recognizes the vital role businesses play in driving the economy and the importance of keeping employees on payroll during times of economic hardship.
What if my business already qualified for the Paycheck Protection Program (PPP) can we still qualify for the ERC?
According to section 206(c) of the Taxpayer Certainty and Disaster Tax Relief Act of 2020, employers who qualify for the employee retention credit (ERC) can still claim it even if they have received a Paycheck Protection Program (PPP) loan. The ERC can be claimed on qualified wages that were not used as payroll costs for PPP loan forgiveness. This provision allows eligible employers to potentially benefit from both the ERC and the PPP loan program.
To determine your eligibility, businesses must have either suspended operations due to government mandates or experienced a decline in gross receipts. At Stauffer & Associates, we have a dedicated team ready to assist you in identifying if you qualify for this credit. Don’t hesitate to reach out to our office or schedule a free consultation with one of our experts. We are here to help you boost your business’s bottom line and navigate through these uncertain times.