Understanding Your Eligibility
In a world still grappling with the impacts of COVID-19, businesses across the U.S. have been hit hard. In response to these economic challenges, the U.S. government introduced the Employee Retention Credit (ERC), a fully refundable tax credit designed to encourage businesses to keep employees on their payroll. But how do you know if your business qualifies for this credit? Let’s break it down.
What is the Employee Retention Credit (ERC)?
Established as part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act in March 2020, the ERC aims to incentivize businesses to retain employees during periods of economic downturn induced by the COVID-19 pandemic. The Act was further extended and expanded under the Consolidated Appropriations Act of 2021 and the American Rescue Plan Act of 2021.
Qualifying for the ERC
Determining eligibility for the ERC involves understanding a few key components of the criteria outlined by the IRS:
The exact qualifications for the ERC can be complex and depend heavily on your business’s specific circumstances.
Understanding the criteria and determining whether your business is eligible for the Employee Retention Credit can be daunting, but it doesn’t have to be. The team at Walston Advisory Firm is available to consult with you and your business on these regulations to assist you in determining your eligibility and maximizing your benefits.
The ERC is a valuable relief measure for businesses during these challenging times, offering significant financial benefits. By understanding the eligibility criteria, you can better navigate the complexities of the ERC and ensure your business takes full advantage of this opportunity.