SAN ANTONIO, TX / ACCESSWIRE / July 13, 2023 / In 2023, pivotal updates to the Employee Retention Tax Credit (ERTC) have emerged, with substantial financial implications for businesses nationwide. These changes to the ERC program reflect a shifting economic landscape, responding to the evolving needs of business enterprises striving for recovery and growth in post-pandemic environments. Understanding these current updates is crucial for employers to effectively leverage this IRS tax relief credit, ensuring the continued retention of valuable employees and ongoing business operations.
The Employee Retention Credit from the IRS is designed to give a substantial tax credit to eligible employers who kept W2 employees on payroll during the pandemic. Image Credit: PeopleImages12 / 123rf.
"The Employee Retention Tax Credit has evolved from inception in 2020, Many changes to the ERC program have evolved in 2021, 2022, and now 2023. This continues to confuse many business owners on eligibility and how to calculate their potential refund amounts," said Marty Stewart, Chief Strategy Officer (CSO) with Disaster Loan Advisors (DLA). DLA has assisted over 700+ companies with their ERC / ERTC Tax Credit claims, by-the-book per current IRS rules and guidelines.
Evolution of the Employee Retention Credit Program
The Employee Retention Tax Credit (ERTC) is an Internal Revenue Service (IRS) government program established by the CARES Act to assist businesses in retaining their employees during challenging times.
There is great news for business owners that had W-2 employees during the 2020 and 2021 tax years. Eligible businesses and employers can file retroactive claims for the ERC credit until April 15, 2024, for eligible quarters in 2020, and until April 15, 2025, for eligible quarters in 2021.
Employee Retention Credit 2020
The year 2020 marked a crucial turning point as the Coronavirus Aid, Relief and Economic Security (CARES) Act introduced the Employee Retention Tax Credit. Aimed at facilitating businesses in retaining their workforce during these challenging times, it offered significant financial relief.
The ERTC served eligible employers and small to medium-sized businesses by providing up to 50% of qualifying wages paid between March 13th, 2020 and December 31st, 2020. This means up to $5,000 per employee for the entire 2020 tax year.
Surprisingly, only a fraction of business owners were familiar with this beneficial program. Exactly four percent, according to the National Federation of Independent Business (NFIB). Despite its low initial uptake rate, it's clear that ERTC acted as an essential lifeline for many companies during an extremely testing period. To qualify for this credit, businesses had to provide substantial proof illustrating their negative impact through partial or total shutdowns or gross receipt reduction.
Application processes involved completing Form 941-X, Adjusted Employer's Quarterly Federal Tax Return or Claim for Refund, which eased the process of claiming relief under ERTC.
While originally set until December 31st, IRS ERC credit extended the deadline till September 30th due to increasing demand from distressed businesses across various sectors. This move provided enough breathing space for companies still grappling with pandemic-induced disruptions.
Employee Retention Tax Credit 2021
In 2021, the Employee Retention Tax Credit (ERTC) played a crucial role in helping businesses navigate the challenges brought on by the pandemic. As part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act, this tax credit is designed to provide financial relief to eligible employers who have experienced disruptions in their operations.
One important fact about ERTC tax credit for 2021 is that it has been extended until September 30th. This means eligible employers can claim this tax credit for wages paid between January 1st and September 30th. Startup recovery businesses have until December 31st, 2021.
The extension allows more businesses to take advantage of this valuable resource and receive much-needed assistance.
Another key point to remember is that even if you received a Paycheck Protection Program (PPP) loan, you could still qualify for the ERC tax credit. This allows businesses to benefit from both programs and maximize their financial support during these challenging times.
By understanding the specifics of ERTC for 2021 and how it applies to your business, you can save thousands of dollars in payroll taxes and ensure greater stability for your employees. Consulting with a knowledgeable tax professional or utilizing resources like ERC Today or Aprino's ERC services will help guide you through the application process effectively.
Overall, staying updated on the latest information regarding Employee Retention Credit is essential as government rules may change over time due to ongoing efforts to provide economic relief during these uncertain times.
Employee Retention Credit 2022
In 2022, the Employee Retention Tax Credit (ERTC) continued to provide vital support for businesses and eligible employers. This tax credit was created under the CARES Act to help companies retain their employees during challenging times.
As part of the ERTC program, eligible businesses can receive up to 70% of qualifying wages from January 1st, 2021 to December 31st, 2021. This means up to $7,000 per employee, per quarter in 2021. That is up to $21,000 to $28,000 per employee depending on business eligibility and when the business started.
The ERTC is a valuable lifeline that helps businesses keep their doors open and maintain their workforce. It offers financial relief by offsetting taxes owed or providing a refundable tax credit.
To qualify for this credit, businesses must demonstrate that they experienced either a partial or total shutdown due to government mandates or suffered a significant decline in gross receipts compared to pre-pandemic levels.
As an employer, taking advantage of this tax relief measure is essential as it can greatly alleviate financial strain and help you retain your valued employees. By understanding the eligibility requirements and filing process outlined by the Internal Revenue Service (IRS), you can ensure that you maximize your benefits through the Employee Retention Tax Credit in 2022.
Employee Retention Tax Credit 2023
In 2023, the Employee Retention Credit (ERC) continues to provide crucial support for businesses and eligible employers. The CARES Act established this tax credit to help companies keep their employees on the payroll during challenging times.
Despite its significant benefits, many business owners are unaware of this valuable resource. In fact, according to the National Federation of Independent Business (NFIB), only a small percentage of small business owners are familiar with the ERTC program.
To qualify for the ERTC in 2023 and beyond, businesses must prove that they were negatively impacted by a partial or total shutdown or experienced a significant reduction in gross receipts. Employers can apply for this tax credit by completing and filing Form 941-X, Adjusted Employer's Quarterly Federal Tax Return, or Claim for Refund.
Remember that receiving a Paycheck Protection Program (PPP) loan does not disqualify you from claiming the ERTC. By taking advantage of the Employee Retention Credit in 2023 and beyond, businesses can receive much-needed financial relief while keeping their employees on board.
IRS Guidance and Deadlines for ERTC Applications and Filing ERC Tax Credit Claims
The IRS has remained diligent in issuing warnings about ERC scams, and advises businesses to stay protected. They further cautioned to avoid paying a percentage or contingency fee based on your employee retention credit refund amount.
Eligible employers and businesses ERC deadline isn't until April 15th, 2024, for retroactively filing ERC credit claims for eligible quarters from the 2020 tax year. April 15th, 2025, is the deadline to claim the tax credit for eligible quarters from the 2021 tax year.
About Disaster Loan Advisors Employee Retention Credit (ERC) Services
Disaster Loan Advisors (DLA) is a trusted team of financial tax professionals and Employee Retention Credit (ERC) consulting specialists dedicated to saving businesses from lost sales, lost customers and clients, lost revenue due to financial and economic harm caused by the COVID-19 / Coronavirus disaster, Delta and Omicron variants, and other recession and inflation downturns in the economy.
Having worked with over 1500+ business clients navigate the SBA Economic Injury Disaster Loan (EIDL), Paycheck Protection Program (PPP), and Restaurant Revitalization Fund (RRF) programs, DLA further refined its expertise in the ERC Tax Credit IRS program having assisted more than 700+ companies with their ERC Claims. Assisting ownership groups with multiple business entities, multiple location business owners, and other complex situations that require an expert tax and accounting strategist to be brought in to assess the situation and create the most strategic path forward.
DLA further specializes in another key pandemic-era SBA / IRS program where business owners are leaving a lot of relief fund money on the table. It is the often misunderstood and confusing Employee Retention Tax Credit (ERC) / Employee Retention Tax Credit (ERTC) program whereby company owners and partners can retroactively receive up to $26,000 to $33,000 back for each W-2 employee they had on payroll for the 2020 and 2021 tax filing years. Done correctly, these tax credits or cash refunds can be claimed retroactively for up to 3 years.
It's encouraged that business owners obtain professional assistance in going through the complex 941-X amended filing process to help your company maximize the full value of the ERC Credit Program, while staying safe and compliant within the complex IRS rules and regulations for claiming the ERC Credits.
DLA doesn't charge a percentage (%) of your ERC refund like many companies are charging. Instead, DLA works on a reasonable professional flat-fee basis. If you are looking for an ERC company that believes in providing professional ERC services and value for small business owners, in exchange for a fair, reasonable, and ethical fee for the amount of work required, Disaster Loan Advisors is a good fit for you.
Need Strategic Employee Retention Tax Credit Guidance?
CONTACT:
Disaster Loan Advisors
Elena Goldstein
Director of Media Relations
877-463-9777 ext. 3
elena.goldstein@disasterloanadvisors.com
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For an Employee Retention Tax Credit Deep-Dive Evaluation Analysis for Your Business, Visit:
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SOURCE: Disaster Loan Advisors (DLA)
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