The employee retention credit is a tax credit that employers can still retroactively claim if they paid eligible workers during the midst of the COVID-19 pandemic in 2020 and 2021. The credit helps businesses negatively impacted by COVID recover a portion of their employment taxes. To claim this tax credit, an employee should contact an ERTC service provider online and file for the same.
Below are the basic guidelines and steps for claiming your employee retention tax credit. First, however, it’s important to discuss a little more about the ERTC.
Who Qualifies for the ERTC?
An ERTC service can reduce eligible businesses’ employment tax liabilities by thousands of dollars per employee for 2020 and 2021. The credit is available to any employer trading or doing business in 2020 whose business operations were stopped due to an order received from the government during COVID-19 or any employer, who can demonstrate that their business’s gross receipts for a calendar quarter in 2020 declined by more than 50% compared to the same quarter in 2019 or by more than 20% as compared to 2019 for calendar quarters in 2021.
How to Claim the ERTC?
Claiming the Employee Retention Credit (ERTC) on your 2020 or 2021 federal income tax returns is easy with the right help. Most service providers simply require you to fill out a basic inquiry, hop on a quick introductory call, provide some financial details in order for an eligibility analysis to be conducted – then simply wait while your ERTC service provider prepares all necessary documents. From there, they’ll usually coordinate between you and your payroll provider to file form 941-X. Once your amended returns are filed, the only last part you have to do is to wait for your refunds.
How Will an ERTC Service Provider Help
Your ERTC service provider can help you correctly fill out Form 941-X to adjust previously filed employment taxes. These financial professionals can help accurately calculate what’s due so that benefits from this credit aren’t overlooked or underutilized. It is not uncommon for example for employers to miss how far their eligibility for this tax credit actually extends. While quarterly eligibility for the 2020 and 2021 tax years depends in part on proving a reduction in a business’s gross receipts compared to the equivalent quarter in 2019, there are nuances that can extend a business’ eligibility to a subsequent quarter under the safe harbor rule. Don’t miss your tax credits – get an ERTC service provider to help.
The ERTC is an excellent tool for any business trying to recover in tough times. With the credit, you may receive back your employment tax liability by up to $26,000 per employee (maximum total refund if an employer can demonstrate eligibility for all quarters). You can avail of this service online from a known tax credit services provider.