At the end of last year, changes to the CARES Act made the Employee Retention Credit (ERC) suddenly within reach and very relevant to many employers. Previously not compatible with the PPP, these changes created an opportunity for many businesses who suffered dramatic drops in revenue or from government-mandated shutdowns.
Under the Consolidated Appropriations Act of December 2020 and the American Rescue Plan of March 2021, companies can now leverage the wages of employees they retained through 2020 and all of 2021 into tax credits that will directly offset employment taxes paid to the IRS on Form 941.
Determining whether or not your company qualifies can be tricky and the IRS will not allow the use of wages that were previously used for PPP Forgiveness to be used for the ERC. However, it is well worth the effort.
These credits can be valued up to $26,000 per retained employee.
Most employers don’t have the TIME, RESOURCES or INCLINATION to sort through this process and may not be able to rely on their CPA’s to help them due to the proximity of tax season.
Commonwealth can help with its Employee Retention Credit Seeker Program!
We have compiled a list of additional resources to help educate you on the ERC, including a recent webinar Commonwealth hosted that provides an in-depth look at this refundable payroll tax credit. Now, are you ready to find out if you are eligible? Contact us to find out!