If you were able to hold on to some of your full-time employees and keep them on payroll while your doors were closed, you could be eligible for something called the Employee Retention Credit.
This past year really took a financial toll on small businesses everywhere. Many small businesses found themselves unable to hold on to their beloved full-time employees or had to close their doors entirely for an undisclosed amount of time. Needless to say, we were all really going through it as employers last year.
Let’s take a look at just what this Employee Retention Credit is and why it’s important to use it for your business.
What is Employee Retention Credit?
So what exactly is this Employee Retention Credit thing all about?
The Employee Retention Credit was enacted in 2020 as part of the economic relief plan for Americans recovering from the financial impact of COVID on businesses and individuals alike.
It’s essentially a big tax break for small businesses that kept their full-time employees on payroll while everything was shut down.
The credit offers up to $5,000 per full-time employee in 2020 and up to $14,000 per full-time employee in January-June of 2021.
It provides a lot of relief for small businesses that were unable to keep their doors open.
Who Can Claim Employee Retention Credit?
So who exactly can claim this employee retention credit?
Most small businesses can, as the rules have changed from last year to this year. It used to only be for small businesses that employed less than 100 full-time employees, but this year’s revision allows companies with less than 500 employees to claim the credit.
Other qualifiers include that your business must have been closed or suffer reduced hours due to government guidelines surrounding CDC protocols.
You also must have made comparably less revenue this year than the same quarter in 2019. This is defined by at least an 80% decrease in gross receipts.
Why is Employee Retention Credit Important?
So why is this Employee Retention Credit so important to small business owners?
There are quite a few reasons why this tax relief credit is proving beneficial to millions of small business owners who have already requested it.
Here are just a few of these benefits.
It’s a Significant Tax Break
First and foremost, it is a very significant tax break. Small businesses already go through a lot of economic problems as it is, and taxes are one of the most stressful parts of running a business (aside from, of course, all of the other stressors).
A tax break is always beneficial to any business.
It Can Help Save Your Business
This past year saw a significant downturn in the economy, and small businesses were hit the hardest.
This Employee Retention Credit could be just the thing that your business needs to keep afloat. It can quite literally save your business in the direst of times.
It Keeps Your Employees Protected
When you own a small business that employs few people, your employees become like family to you. As their employer, it’s only natural to want to do everything in your power to take care of them so that they want to stay working for you.
The Employee Retention Credit can allow your business to keep all of your full-time employees on the payroll. This keeps them around and keeps them happy.
Get Your Employee Retention Credit Your Company Deserves
The Employee Retention Credit was designed to help keep your business afloat and your employees employed and happy. You can apply for the Employee Retention Credit today to get the financial relief your small business needs.
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