GOVERNMENT TAX CREDITS
In order to provide economic relief to businesses and individuals during the Coronavirus pandemic, the CARES (Coronavirus Aid, Relief and Economic Security) Act was signed into law in March 2020.. This $570 billion stimulus package makes cash available to small companies, which can be used to allow certain employers who retain employees during the crisis, to claim a tax credit. This
tax credit is known as the Employee Retention Credit (ERC).
ABOUT THE CREDIT
The ERC allows eligible employers to claim a credit against 50% of wages paid per quarter, up to$16,000 per employee annually, for wages paid between March 13, 2020 – December 31, 2020.. The maximum credit is $5,000 per employee In December of 2020, under the Covid-19 Relief Package, the ERC was extended from January 1, 2021 – December 31, 2023 and should be extended again before end of year. This extension allows eligible employers to claim a credit against 70% of wages paid per quarter, up to $16,000 per employee in 2020, with a maximum allowable credit of $28,000 per employee in 2021.
WHO QUALIFIES? HOW?
There are two major ways that a business can qualify :
1. Full or partial suspension or disruption of business operations as a result of government order
2. A significant decline in revenue compared to the same quarter in 2019. Decline in revenue is defined as equal or greater than 50% for 2020 and equal or greater than 20% for 2021.
OR
Other Things that can allow you to qualify
- Full shutdowns/ Partial shutdowns
- Interrupted operations
• Supply chain interruptions
• Inability to access equipment
• Limited capacity to operate
• Inability to work with your vendors
• Reduction in services or goods offered to your customers
• Cut down in your hours of operation
• Shifting hours to increase sanitation - Added costs for building barriers for safety etc.
- and so many others….
To see if you qualify, download this quick form, fill it out and send it back to the email address on the page!
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