Question: What does the new Employee Retention Tax credit mean for small business owners?
Answer: An opportunity for immediate tax relief for businesses struggling to make payroll due to COVID-19.
Across nearly every industry sector, COVID-19 has forced business owners to navigate unprecedented operational circumstances. Many are seeking answers to questions regarding the welfare of their employees, and the best course of action to protect them and the financial wellbeing of their companies. Here is some high-level info about the Employee Retention Tax Credit:
- Provides credit for business owners maintaining payroll despite full or partial shutdowns
- Covers 50% of qualified wages up to $10,000 per employee for wages earned between 3/12/20 and 1/1/2021
- Employers are eligible for the credit if they operate during 2020 and are either:
- Partially or fully unable to operate due to the COVID-19 crisis
- Experiencing a significant decline in gross receipts
- Funds are available immediately to business owners via reduced employee tax deposits required by the government
Though business owners may have more questions than answers right now, there are resources that can provide assistance. For more details on options currently available to business owners, as well as situational examples from the US Treasury Department, IRS and US Department of Labor, click here. Be sure to consult a CPA or tax professional in order to make the best use of this credit for your unique needs.