The Employee Retention Tax Credit (ERTC) program has been amended, extended, limited, and phased out. But business owners are still leaving billions of dollars on the table because of misinterpretations or confusion.
While the ERTC ended at the end of 2021, businesses can still claim the credit for the first three quarters of 2021. So, wages paid through September 30, 2021, are eligible for the tax credit.
Who is eligible?
It’s hard to find businesses and tax-exempt organizations that aren’t eligible. The ERTC was put in place to support all businesses and charities impacted by federal, state, and local government orders. For example, if you manage a hotel and have had a below-average occupancy rate because in-person conferences were suspended, you’re eligible.
How does the credit work?
For 2020, the ERTC provides a 50% credit on wages paid to employees between March 12, 2020, and December 31, 2020, up to $10,000. That means you could claim a $5,000 credit for each person you employed in 2020.For 2021, the ERTC provides a 70% credit on wages paid to employees between January 1, 2021, through September 30, 2021, up to $10,000. So, you can claim a $7,000 credit for each employee you employed in the first three quarters of 2021, with a maximum credit of $21,000 per employee.
How does a business claim the credit?
Employers must file IRS Form 941X for each qualifying quarter to claim the credit. The Employee Retention Tax Credit has been a lifeline for countless businesses and non-profits, yet so many others are missing out on the advantages of the ERTC. Financial help is available, but you have to do your part. Miami CFO can complete the process for you from beginning to end. Let’s set a time to go over the process and collect the information we need to get started.
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