Did you know that only 7 percent of small businesses were familiar with the employee retention tax credit as of 2021? It’s quite possible that your business is still getting to know what the employee tax credit is. This tax credit is part of the CARES Act of 2020, and it works by rewarding businesses for retaining their employees with a notable tax credit.
If you’re looking for ways to help your business’s bottom line and invest in growing your business then you owe it to yourself to take some employee retention credit advice. The good news is that you’re found a great employee retention credit guide that will help you make the most of this tax credit.
Keep reading this article to learn more today!
What Is the Employee Retention Credit?
The employee retention tax credit was put into place after the CARES Act passed, which allowed for businesses to claim tax percentages on certain employees’ wages at rates as high as 50 percent. It was a tax credit that was designed to help businesses that were impacted by the COVID-19 pandemic and the economic crisis that followed.
The good news when it comes to the employee retention credit is that the government has expanded the credit up to rates as high as 70 percent compared to the previous year. They’re even allowing a grace period where you can continue running your operations no matter what is happening with the economy. You can keep tabs on the situation at https://erctoday.com/.
What Wages Qualify?
The employee retention tax credit was put into place after the CARES Act passed. This act allowed businesses to claim tax percentages on certain employees’ wages at rates as high as 50 percent. It was a tax credit that was designed to help businesses that were impacted by the COVID-19 pandemic and the economic crisis that followed.
You can take a look at the IRS’s website for an ultra-detailed look at the qualified wages for this tax credit as well as the healthcare expenses involved. You also need to ensure that you have the right number of employees working at your business. You won’t qualify for this tax credit if you have more than 500 employees working at our business.
The number of employees that you had in 2019 can also impact your eligibility. Businesses that had more than 500 employees in 2019 will have a hard time getting the employee retention tax credit. You’ll only get coverage for employees that weren’t working due to forced closure or a decrease in your business.
Capitalize On the Employee Retention Tax Credit
The employee retention tax credit is a great option if you’re running a small business. It’s perfect if you’re looking to get support from the government to keep growing your operations. You need to make sure that you had less than 500 employees in 2019. You’ll also get to claim up to 70 percent of wages up to $10,000 for each of your employees that qualify.
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