You may be eligible for thousands of dollars in ERC tax credits.
Many business owners had to make adjustments and modify the way they conducted businesses because of Covid. Restaurants couldn’t use their dining rooms, they offered pickup and delivery only, for instance. Retail businesses had to limit the amount of customers in their stores because of social distancing rules. Service and professional businesses had to shift to a remote workforce and close their offices.
These are all forms of Business Suspension. If your normal and customary operations were interrupted because Government mandates forced you to close down or modify your business operations, you might be eligible for compensation through the Employee Retention Credit program.
Originally created within the Coronavirus Aid, Relief, and Economic Security (CARES) Act, the Employee Retention Tax Credit (ERTC) is an incentive designed to encourage employers to keep employees on their payroll as businesses face the lingering economic impacts of the COVID-19 pandemic.
Is your business eligible?
The key is whether any shutdowns, reductions in operations, or substantial alterations were due to a government order related to COVID-19. To be considered an ‘eligible employer’ for the ERC, your modifications or closures must have been directly caused by a city, county, state, or federal directive.
To see whether your business qualifies, you can ask a few simple questions:
- Was your business in an area where there were COVID-19 regulations (at either the city, county, or state level)?
- Did your business modify the way it serviced customers or clients because of these government mandates?
- Did your business modify operations, including staffing or how employees completed their duties?
If you answered yes to any of these questions, your business may qualify for the ERC.
How much is the ERC worth to your business?
A restaurant in Chicago faced a partial business suspension due to a covid-19 government order beginning in 2020 and lasting until the second quarter of 2021. State orders restricted occupancy to less than 50%. This impacted the amount of customers in the restaurant, the total revenue the restaurant could earn, and affected staffing levels.
The restaurant qualified for three separate Employee Retention Credits resulting in over $300,000 in tax credits.
2020 – $98,000
Q1 2021 – $137,000
Q2 2020 – 155,000
Need help with your Employee Retention Credit?
Small businesses should be thinking about how to take advantage of these pandemic relief programs before they run out. Do you think your business is an eligible employer?
These are questions Simpay Payroll experts can help you answer. And, if your company is eligible, we will assist you with reviewing qualified wages, calculating the credits, and filing amended payroll tax returns that allow you to claim your ERTC credits with the IRS.
