Employee Retention Credit: Getting the Most Out Of A Valuable New Tax Credit
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If you’re a business owner, you know that finding and keeping good employees is tough. And even if your company is thriving and growing, it can be difficult to keep up with the demands of hiring and training new employees. During the pandemic keeping employees became almost impossible.
What is the Employee Retention Credit?
The employer retention credit is a valuable new tax break for eligible employers who kept their employees on the job. The issue is many companies don’t know how to take advantage of it, which is understandable. The tax code is a living, breathing thing. It’s always in flux and growing over time to meet the needs of our ever-changing world. One area where this has been particularly true is with employer retention credit.
Who is Eligible for Employee Retention Credits?
The Pandemic came unexpectedly and it hit small businesses and big businesses around the world hard. The Infrastructure Investment and Jobs Act was enacted on November 15, 2021. Part of this act contained the Employee Retention Credit in an effort to help an eligible employer retain workers during a time when jobs were scarce and unemployment was high.
This tax credit Is Employee Retention Credit business owners can retroactively apply for the credit by filing an amended tax return. The Internal Revenue Service (IRS) is offering a one-year amnesty period to help employers who may have inadvertently missed out on this credit.
How Much Can An Eligible Employer Qualify for?
Employee Retention Credit: For each employee, wages (including certain health plan costs) up to $20,000 can be counted to determine the amount of the 50% credit. Because this credit can apply to wages already paid after March 12, 2020, many struggling employers can get access to this credit by reducing upcoming deposits or requesting an advance credit on Form 7200, Advance of Employer Credits Due To COVID-19.
Employers, including tax-exempt organizations, are eligible for the credit if they operated a trade or business during the calendar year 2020 and experience either:
The full or partial suspension of the operation of their trade or business during any calendar quarter because of governmental orders limiting commerce, travel, or group meetings due to COVID-19, or a significant decline in gross receipts.
What Can An Employee Retention Tax Credit Be Used for?
The new credit was designed to help businesses offset costs tied to staying competitive in today’s tough employment market in a post covid world. If you are considering making your business location more attractive to customers, equipment upgrades, additional employees, or investors in the coming year, look into the employee retention tax credit. The employee retention tax credit doesn’t tie you down on what the credits can be used for. By taking advantage of this useful tool, businesses can make it through these hard times and continue their path toward growth and success.
Conclusion
Our team at Upwise Capital is here to assist you with every step of the way to secure whatever funding is needed to help your business grow. If you have any questions regarding how the employee retention program works, please call our team at 77-55-UPWISE or email [email protected]. You can also apply online for Employee retention credit, so you can get back to work and running your business.
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