As an ERTC expert, I understand how valuable this tax credit can be for small business owners. That’s why I’m excited to share a content marketing strategy that will help businesses understand how to make the most of the employee retention tax credit
First, let’s start with the basics. The employee retention tax credit is a refundable tax credit that helps businesses keep their employees on payroll during the COVID-19 pandemic. It’s available to businesses that experienced a significant decline in gross receipts or were fully or partially shut down due to government orders
Now, let’s talk about how businesses can claim this tax credit. The first step is to determine if your business is eligible. If it is, you’ll need to calculate the amount of the credit. This can be a complicated process, but our team at https://employeeretentioncreditworksheet.com has developed an easy-to-use worksheet that simplifies the process
Once you’ve calculated the credit, you’ll need to file Form941 to claim it. The deadlines for filing this form vary depending on when your business started claiming the credit. Our team at https://employeeretentioncreditworksheet.com can provide you with a detailed timeline of when and how to file
Employee Retention Tax Credits (ERTC) for medical offices, chiropractors, health clinics, and rural doctors, along with key dates. Here are the top 25 things to know:
- ERTC is a tax credit aimed at encouraging businesses to retain their employees during the COVID-19 pandemic.
- Eligible employers can claim the credit against employment taxes.
- The credit is available to businesses, tax-exempt organizations, and medical providers.
- To be eligible, a business must have experienced a significant decline in gross receipts or been subject to a government-mandated shutdown.
- The credit is refundable, meaning if it exceeds the amount of applicable employment taxes, the excess is refunded.
- ERTC is calculated on a per-employee basis.
- Eligible wages include salaries, hourly pay, bonuses, commissions, and paid time off.
- Employee benefits such as health insurance, retirement contributions, and other fringe benefits are also considered eligible wages.
- ERTC initially covered wages paid between March 13, 2020, and December 31, 2020.
- The Consolidated Appropriations Act, 2021 (CAA), extended the ERTC through June 30, 2021.
- The American Rescue Plan Act (ARPA) further extended the credit until December 31, 2021.
- The maximum credit amount was increased from 50% to 70% of eligible wages per employee, per quarter, starting from January 1, 2021.
- The maximum eligible wages per employee, per quarter, increased from $10,000 in 2020 to $10,000 for each quarter in 2021.
- The significant decline in gross receipts threshold was reduced from 50% to 20% for 2021.
- For 2021, businesses with 500 or fewer employees can claim the credit, including new hires, regardless of whether the employee provides services.
- ERTC cannot be claimed for wages paid to owners with more than 50% ownership in the business and their family members.
- Employers who received a Paycheck Protection Program (PPP) loan can still claim ERTC, but not on the same wages used for PPP loan forgiveness.
- The credit is claimed on the employer’s quarterly employment tax return (Form 941) or adjusted employment tax return (Form 941-X).
- Employers can request an advance of the credit by filing Form 7200 if their anticipated credit exceeds their employment tax liability.
- Employers can also reduce their federal employment tax deposits in anticipation of the credit.
- Detailed records of employee wages and health insurance costs must be maintained to substantiate the credit.
- The IRS has provided guidance on ERTC through various notices and FAQs on their website.
- Employers are encouraged to consult with a tax professional to determine their eligibility and ensure compliance with ERTC requirements.
- There is no current extension of the ERTC beyond December 31, 2021.
- Businesses should monitor future legislation and IRS guidance for potential updates or changes to the ERTC program.
Key Dates:
- March 13, 2020: ERTC becomes available.
- December 27, 2020: CAA extends ERTC through June 30, 2021.
- March 11, 2021: ARPA