Employee Retention Tax Credit
COVID-19 has been devastating for small business owners and their employees.
Over the course of the COVID-19 pandemic, countless businesses have been forced to reduce their headcounts due to circumstances entirely out of their control.
The Employee Retention Credit under the CARES Act offers significant compensation for business owners who make the difficult decision to retain employees despite the financial impacts of COVID-19. Keep reading to learn more about the Employee Retention Tax Credit for businesses, and schedule a free consultation with George A. Spencer, CPA. to find out if your business qualifies.
What Is the Employee Retention Credit?
The Employee Retention Tax Credit (ERC) was created in response to the massive, nationwide layoffs prompted by the hardships of COVID-19. This legislation passed under the CARES ACT encourages businesses to keep employees on their payroll, offering a significant tax credit to eligible employers whose businesses have been financially impacted by COVID-19.
What Are The Benefits of the ERC?
Under the ERC, eligible businesses that COVID-19 has negatively impacted can receive a refundable tax credit equal to 50% of up to $10,000 in wages paid. For example, an eligible business that paid $5,000 in wages to employees can receive a refundable tax credit of $2500, with the maximum refundable tax credit amount being $5,000 for $10,000 of wages paid.
If a refundable tax credit like this would be a game-changer for your business, get in touch with the tax-law experts at George A. Spencer, CPA, today!
Eligibility Requirements For the ERC
For the purposes of the Employee Retention Credit, eligible employers must:
Have conducted business during the calendar year 2020 (includes tax-exempt organizations)
Have fully or partially suspended operation during a calendar quarter of 2020 due to an order from an appropriate governmental authority. The cited order(s) must be a limit to commerce, travel, or group meetings due to COVID-19.
Provide evidence of a significant decline in gross receipts during the said calendar quarter.
Find Out If You Qualify For The Employee Retention Tax Credit
George A. Spencer, CPA. specializes in helping small businesses understand and utilize the many financial, tax, and accounting resources at their disposal. Schedule a free consultation with our Jacksonville CPA firm today to find out if you qualify for the Employee Retention Tax Credit.