In direct response to the pandemic, the federal government enacted various simple programs designed to help businesses and their employees. By far, the most well-known is the Paycheck Protection Program (PPP), which provided loans designed to keep small businesses afloat and protect workers from prolonged pay disruptions.
However, there is a lesser-known program that some business owners were completely unaware of during the pandemic, known as the Employee Retention Tax Credit (ERTC) and alternatively referred to as the Employee Retention Credit Program. While the program ended at the close of 2021, it is still possible to claim backdated benefits if you qualify.
What Is the ERTC?
The Employee Retention Credit Program gave business owners a simple opportunity to obtain credit for qualified expenses, including some health insurance costs and wages. The program’s terms and conditions varied, depending on which acts employers used to access pandemic-relief benefits.
When applied to CARES Act-related funds, the ERTC allowed employers to claim a refundable credit for as much as 50% of qualified wages, provided they received a loan under the PPP. The per-employee maximum claims for annual wages was $10,000.
The Consolidated Appropriations Act of 2021 expanded ERTC benefits. Under these new provisions, employers could claim credit for as much as 70% of wages paid. Additionally, this act increased the per-employee claim limit to $10,000 per person per quarter. Businesses are eligible for these benefits whether they received PPP funding or not.
The American Rescue Plan Act included the same provisions as the Consolidated Appropriations Act. However, it extended the expiration date of the ERTC to the end of 2021.
How Can You Access ERTC Benefits?
According to the American Rescue Plan Act, employers can claim eligible ERTCs on Medicare and Social Security taxes. These credits will lower the employers’ tax liability, potentially saving them tens of thousands of dollars.If you did not claim ERTC benefits in the requisite tax year, you can still file a simple backdated claim. Although the Employee Retention Credit Program has expired, you can review payroll data from March 12, 2020, to September 30, 2021. Select businesses can also claim wages paid between October 1, 2021, and December 31, 2021.
Determine Your Eligibility
Compiling, organizing, and analyzing 18 months of payroll data can be a tedious undertaking, especially if you are using antiquated payroll software. It can also lead to plenty of errors and mistakes. To streamline this process, you should implement the total business solutions offered by Simpay.
Simpay’s simple but powerful technology suite can assist with everything from payroll to employee management. Once you transfer your payroll data to our intuitive platform, you can easily review your past financial data to determine eligibility for ERTC benefits.
If you are interested in taking advantage of the Employee Retention Credit Program, you need to act fast, as the program has already been sunsetted. Knowing if you qualify and utilizing the benefits of the program can help sustain or jumpstart your business once you collect your backdated benefits.
Contact Simpay today to learn if your business qualifies for ERTC benefits and get back to doing what you do best – Running your business.