Every year small businesses pay a nearly 20% tax rate on their earnings. These expenses can have a huge impact on the success of the business and can be very difficult to manage.
That’s why business owners are always looking for ways to reduce their tax bills and utilize tax credit programs for their benefit. Over the years several programs have been introduced to help small businesses through difficult times, like the ERC Program.
The employee retention credit program was only created in 2020 and enhaced twice in 2021, so many business owenrs are unsure of what it is and how it works. This guide will help you determine if you can use this business intitiative and what steps you need to take.
What is the Employee Retention Credit?
The employee retention credit was created during the pandemic to help small businesses retain their critical staff. If your businesses had a notable decline in revenue or government-regulated shutdowns, the ERC is almost certainly for you.
There is a wide range of factors that make up your actual credit depending on the specific’s of your business, such as whether you took PPP and the employer portion of your staff’s health insurance expenses.
Since each case is unique, the final credit allowed will vary by business and their unique circumstances.
Will it Benefit My Business?
It can feel a little overwhelming to spend time gathering the required documentation for review, but the good news is, there is no downside to applying for the ERC to see if your business qualifies.
The best case is that you qualify and you recieve up to $26,000 per employee and use the cash as you see best for your business, no strings attached. This is welcome news given that we are moving into another deep economic downturn.
With just the right servicer, the cost will be free to determine if you qualify and how much your credit will be. But it’s not entirely free, it will require an hour or two out of your or your team’s busy schedules. But the ROI is considerably large.
How Do I Apply For ERC Eligibility?
While it might sound straightforward to figure out if you paid any wages that would qualify for ERC benefits, it can actually be quite tedious. There are a lot of steps that must be taken to verify your payments and eligibility through the IRS. This is why it’s best to work with an expert to get the job done.
They’ll help you gather the required ERC Documentation, perform the calculations for you, and make sure you get every dollar you deserve!
Everything You Need To Know About ERC
Understanding all of the ins and outs of taxes, including the ERC, can be a full-time job. You want to make sure you’re getting everything right so you don’t end up paying more than you need to but it’s overwhelming!
That’s why it’s so crucial to work with tax professionals who can walk you through every step. They’ll make sure you have the best situation you can with all of the write-offs and credits applied where possible. You’ll be amazed at how much money you save simply by having the right people on your team.
Our team of tax professionals specializes in the employee retention program and determining who is eligible for the credit. Apply today to figure out if your business qualifies!