Many business owners faced numerous problems because of the Covid pandemic. For instance, they could not make enough money to fund business operations and pay their employees.As a result, they decided to lay off some workers. The sacking trend continued for some time until the government introduced the employee retention credit to prevent more employees from losing their jobs.
One of the reasons why the government introduced this program was to help small businesses keep some of their best employees. If you are struggling to pay your workers, applying for the financial assistance might be a good move.Read more to find out more about this tax credit to know whether you are eligible and how you can get the money.
The CARES Act that the government introduced in 2020 was the one that introduced the ERC tax credit. Through this program, companies with financial challenges had the right to claim half of the money they spent on salaries.They were allowed to claim the money between mid-March and December 31st, and they were to get a maximum of $10,000 per employee. There was an amendment to the Act in 2021, and one of the changes made to it was the right to claim up to 70 percent of wages, which employers could get per quarter for that year.
Tax credit can be a good option if you want to retain the best talent in your company but don’t have money to pay their wages.The best thing about this program is that you will get the financial assistance even if you didn’t pay income taxes in 2020 or 2021.
But, some companies might not qualify to get this money. So, you need to know whether you are eligible before rendering your application.One of the things that can make you fail to get financial help is the number of full-time employees in your company. When the government first introduced the program, they only allowed companies with less than 100 full-time employees to seek this financial assistance. The government later amended the act and gave the companies with up to 500 permanent employees the right to benefit from this program. The government also gave start-up companies the right to claim this money. However, only start-up companies with gross receipts under $ 1 million and those with at least one or two W2 workers were eligible to seek financial help.
It might be advisable to apply for this program if you meet these requirements.This will enable you to get financial help that will enable you to retain hard-working employees. Start the application process today by contacting the relevant organizations.