EMPLOYEE RETENTION TAX CREDIT
Back in 2022, during the Pandemic the government offered 2 programs for financial relief – The Payroll Protection Program loan (PPP) and the Employee Retention Tax Credit (ERTC). Both programs were designed to help employers keep their employees in spite of declining sales and loss of business during the Pandemic. It was a matter of choosing the most beneficial program between PPP and ERTC. Most businesses chose PPP because it was a forgivable loan and it produced higher benefits. Since then, the laws regarding ERTC have changed several times, and has become another chance for businesses who already received a PPP loan.
You can now receive both PPP and ERTC benefits. You qualify if your sales in 2020 dropped 50% or more as compared to 2019. In addition, it also applies to 2021 if sales dropped only by 20% as compared to 2019. The benefit is a 50% tax credit up to $10,000 in annual salary or $5,000 tax credit per employee for 2020. For 2021, it is a 70% credit up to $10,000 per quarterly salary (3 quarters only) with a maximum of $21,000 credit per employee. For both years, the total possible credit is $26,000 per employee. The tax credit is taxable and the 2020 and 2021 tax returns need to be amended to take this into consideration.
The deadline for applying is coming soon, so please contact us to find out if you qualify. We are able to apply for this credit on your behalf.
Also, each year I design an annual New Year’s card with a letter of reflection and “En-courage-ment”. If you wish to receive the card and be on our mailing list, please send an email to [email protected].