Employee Retention Tax Credit
Due to the continued effects of the pandemic on the economy, President Biden signed the American Rescue Plan Act on March 11, 2021. It continued funding that had been approved under the Consolidated Appropriations Act of 2021 (CAA) and it extended funding for the Employee Retention Credit (ERTC) until December 31,2021. In addition, Congress changed some of the requirements to qualify for the credit. Businesses can now claim the ERTC alongside Payment Protection Program (PPP) and other state programs. So, you can claim PPP, other revitalization grants, get your PPP loan forgiven and you still qualify for this credit! Congress has approved with the ERC billions of dollars of tax relief to go to businesses who are keeping employees on payroll.
At Dyer & Associates CPA, PLLC we are seeing many businesses that are not taking advantage of this refundable tax credit. This is real tax dollars that come back to the business and can be used for the business. The main concern is to document the wages you are claiming so you are not double dipping funds for PPP or other revitalization grants and the ERTC. You must follow IRS guidelines. You also document an impact to your business caused by the pandemic there are several ways to qualify. It can be by partial or full suspension, 20% reduction in gross receipts test by quarter, or other ways that may qualify your business for the (ERTC) Employee Retention Credit:
- Full or partial shutdowns;
- Cut down in your hours of operation;
- Inability to work with your vendors or clients place of business closed;
- Interrupted operations or supply chain interruptions;
- Inability to access equipment or limited capacity to operate;
- Reduction in services or goods offered to your customers;
- Shifting hours to increase sanitation of your facility;
Call us or setup an appointment and we will be happy to talk to you about your situation. Most importantly we can help record, document and report what is needed for the IRS so that you get the credit that you deserve. These are vital tax dollars that could help businesses continue to operate and pay employees.