What Is the Employee Retention Tax Credit?
Some reports have suggested that up to one-third of small businesses in this country closed either temporarily or permanently during the COVID-19 pandemic. It’s clear that COVID took a huge toll on the small business landscape over the course of the last few years.
The Coronavirus Aid, Relief, and Economic Security Act—better known as the CARES Act—was put into place to help small businesses out. It provided small businesses with benefits designed to help them ride out the pandemic successfully.
The Employee Retention Tax Credit was one of the most important parts of the CARES Act. Find out what this tax credit is all about below.
A Quick Breakdown of the Employee Retention Tax Credit
As we just alluded to, the Employee Retention Tax Credit was part of the CARES Act. It was put into law in March 2020. It was supposed to encourage small businesses to keep more employees on their payrolls during the COVID-19 pandemic.
The Employee Retention Tax Credit allowed small businesses to claim a tax credit worth up to 50% of the wages that they were paying to the employees on their payrolls. Each small business could claim up to $10,000 per employee.
How the Employee Retention Tax Credit Can Benefit a Business
The Employee Retention Tax Credit was established to benefit both small businesses and American workers alike.
Small businesses could benefit from the Employee Retention Tax Credit by securing an employee tax credit that could be used to bring down their taxes. It made it possible for many small businesses to remain open both during and after the COVID-19 pandemic.
American workers could also benefit from the Employee Retention Tax Credit by hanging onto jobs that they might lose otherwise. Because small businesses were more motivated to keep these workers on their payrolls, the tax credit helped many people keep their jobs during the COVID-19 pandemic.
The Deadline for the Employee Retention Tax Credit
If your small business stays on top of things when it comes to your taxes, you may have already claimed the employee retention credit. But if you didn’t, it isn’t too late to do it now.
You have until March 2023 to take advantage of the Employee Retention Tax Credit. You should look into doing it ASAP so that you don’t miss out on the opportunity.
See If You Qualify for the Employee Retention Tax Credit Today
Not every small business is going to qualify for the Employee Retention Tax Credit. But a large number of small businesses might be able to lower their tax liabilities by utilizing it.
Look into whether or not you qualify for the Employee Retention Tax Credit today. If you do, you might be looking at saving yourself quite a bit of money when tax time comes.
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