Claim Your Pandemic Relief Funds — 4 Changes To The ERTC Program & The Easiest Way To Claim Your Tax Credits
The last few years have been difficult for everyone, and that includes business owners.
To help out with the consequences of shut-downs, employees in isolation, and a general lack of customers, the federal government allocated billions of dollars to various relief funds.
If your business suffered closures or a loss of revenue during the last few years, chances are that you’re eligible for some of those funds.
The eligibility requirements, payout amounts, and a few other details have changed since the programs were first announced, and there are some things you should know before you file.
Employers who plan to do the paperwork themselves should definitely be aware of the newest rules.
Alternatively, you can send a few pieces of paperwork to an Employee Retention Tax Credit (ERTC) specialist, and they’ll take care of everything, including maximizing your returns.
If you’re here for the details, buckle in and let’s get started.
- Eligibility Changes & The Paycheck Protection Program (PPP)
When the ERTC program was first put in place, it was alongside the PPP, which in many cases offered larger benefits.
This caused many employers to sign up for the PPP, which at the time disqualified them for the ERTC.
Later, modifications to the CARES Act allowed all eligible employers to benefit from both programs, and the changes are retroactive.
So whether or not your business signed up for the PPP, you may now be eligible for the ERTC as well.
2. Extensions & Deadlines
Originally pandemic relief funds were only going to be available until the end of December 2020, but as the closures and lockdowns continued, this was soon amended.
While the ERTC program has ended now, you still have lots of time to file for your tax credits for any eligible employee wages paid up to September 30, 2021.
3. Eligible Wage Amounts & Maximum Claims
When the ERTC program started, employers could claim credits for $10,000 of wages per eligible employee, and receive up to 50% of their wages as a credit, to a maximum of $5,000 per quarter, per employee.
In 2021 this was increased to 70% of the first $10,000 of wages for each eligible employee, allowing up to $7,000 per quarter, per employee.
To make sure you’re getting the maximum possible tax credits, it is suggested that you consult an ERTC expert.
4. Small Employer Or Large Employer Classification
One of the less well-known changes that will affect your business may file for 2020 as compared to 2021 is the change to how employer size is determined.
The eligibility for large employers and small employers are different, and it’s important to make sure you are filing under the right set of rules.
In 2020 a small employer was any business with 100 or fewer full-time employees.
As of 2021, a business is considered a small employer if it has 500 or fewer full-time employees.
Filing For ERTC Benefits
As with any tax incentives, you can file the claim yourself after carefully working out the details, or have your payroll or accountant staff do so on your behalf.
With all the changes that have occurred within the ERTC program, and the large sums of money which you may be eligible for, it may be better to have a qualified ERTC expert work on your case instead.
Most experts will require a minimal amount of paperwork and can have your claim filed faster than you might think.
It’s been a tough couple of years for everyone, and hopefully, this can help your business to recover and get back to normal.