As I explained a few months ago, changes in the second spending bill passed in December 2020 expanded the scope of the Employee Retention Credits Program! The bill created access to an even more significant amount of money for businesses struggling to stay afloat during the pandemic.
The program was part of the CARES Act of March 2020. It was meant to help support small businesses with a decrease in revenue of at least 50% compared to the same quarter in 2019. The Treasury Department expanded and extended the program in December 2020 and again in March of this year. So far, more than 30,000 small businesses have taken advantage of the tax credit, claiming more than $1 billion in credits this year.
Here’s how the credit works:
-Through a refundable credit associated with employee retention, the 2020 ERC provides a 50% credit of up to $10,000 in qualifying wages per employee. That’s a credit of up to $5,000 per employee for last year.
-The American Rescue Plan Act signed into law in March expanded the credit even further. For 2021, employers can claim a potential credit of $28,000 per employee for this year.
-Businesses with less than 500 employees can request an advance payment on the under certain circumstances.
The Employee Retention Credit Program was designed to help those businesses impacted the hardest by the pandemic, so the eligibility rules are strict, and the process is complicated. But Miami CFO can complete the process for you from beginning to end. Let’s set a time when I can explain the steps. Use this link to schedule a meeting: https://calendly.com/miami-cfo