Many businesses find themselves struggling to operate in the wake of the pandemic. Fortunately, the government has provided the Employee Retention Credit (ERC) aimed specifically at these types of businesses. Given that ERC’s are tax credits, they can retroactively compensate businesses when filing for 2020 and 2021 tax years. While these credits are undoubtedly beneficial, who is eligible to claim them?
Luckily, the government has made the criteria vague, allowing for many businesses to prove eligibility. If a business can prove they were affected by the pandemic, either financially or on an operational level, they can claim. Another option is to be qualified for the Recovery Startup Business program in quarter three or four in 2021. Even those who have already received a Paycheck Protection Program (PPP) loan can earn ERC’s. Many tax-related businesses have pivoted to make the claiming process even easier for business owners. Credit League, for instance, has allocated attorneys and CPA’s to ERC’s, and even offers a 5-minute eligibility quiz.
Ultimately, ERC’s are a valuable asset to any business, especially those hit the hardest by COVID. Claiming them on the 2020 and 2021 tax years is the best way to ensure business gets back to running smoothly.
