Damiens Law is helping businesses qualify for the Employer Retention Tax Credit (ERTC). By doing it right the first time, they are saving businesses from penalties later. If your business might be eligible for the ERTC, contact Damiens Law at (601) 871-6322 visit https://www.damienslaw.com/contact-us/
Following the Covid-19 pandemic, many businesses have seen how important their ability to adapt has been. Many have also seen periods of feast or famine brought on by world events, entirely out of their control. Because of this, the government has offered some tax breaks to these businesses. Are you a small or mid-sized business looking for ways to reduce your tax bill? If so, you may be eligible for the Employer Retention Tax Credit (ERTC).
This credit can help businesses keep valuable employees and reduce the costs associated with turnover. In this post, we’ll explain what the ERTC is and how your business can qualify for it. We’ll also discuss some of the benefits of using this credit.
What is the ERTC, and How Does it Work?
The Emergency Retention Tax Credit (ERTC) is a refundable tax credit available to eligible employers that helps businesses keep their workers on the payroll. The credit is equal to 50% of qualifying wages paid by an eligible employer to employees during the COVID-19 pandemic, up to $10,000 in wages paid per employee. Eligible employers can claim the credit for wages paid from March 13, 2020, through December 31, 2020.
How Do I Know if my Business is Eligible for the ERTC?
To be eligible for the ERTC, your business must have experienced a decrease in gross receipts of at least 50% when comparing any quarter in 2020 to the same quarter in 2019.
How Do I Claim the ERTC?
The ERTC is claimed as a General Business Credit on your business’s income tax return. You can carry the credit back or forward to other tax years if you don’t have enough tax liability in the year you incur the expense.
What Else Should You Know About the ERTC?
– Wages used to calculate the credit must be paid to employees after March 12, 2020, and before January 1, 2021.
– The credit is not available for wages paid to related parties or owners of the business.
– The credit is capped at $5,000 per employee.
– The credit is refundable, so if it exceeds your tax liability, you will receive a refund for the difference.
Damiens Law Stresses the Importance of Knowing if Your Business Qualifies
The ERTC can be a valuable credit for businesses that have been affected by the Covid-19 pandemic. However, it’s important to make sure that your business qualifies for the credit before claiming it. The process can be tedious and if the paperwork is not properly filled out, it could end up costing the company more money in penalties and fees – on top of paying back the tax credit.
Beware Of Other Businesses Trying to Take Advantage
It is so important that whoever a business is working with fully understands the tax credit and the necessary steps to get it. It is popular for people to gravitate to the ‘new hot thing’ to try and make a quick buck. However, this can result in people filing claims that shouldn’t be filed – just to get people credits. If done improperly, the businesses that they helped received this credit can end up on the hook for a tax audit and all the financial liability associated with it.
How They Are Helping Their Clients
A home health service client came to Damiens Law after speaking with a shady tax credit company that claimed they could get them over $2.5 million. This company was shut down during Covid-19 and lost some of its business as a result. Damiens Law collected income reports, employee hours, employee wages, historical payroll returns, and everything else they would need. After filing all of the forms and doing the calculations, they discovered that this company would actually qualify for $1.6 million in tax credit.
While the tax break amount may be smaller than the previous, the home service company had peace of mind knowing they wouldn’t be responsible for paying back the difference later in addition to taxes and penalties.
The Importance of Working with an Experienced Tax Attorney
Damiens Law has over a decade of experience helping businesses with their taxes. They understand the importance of taking the time to do things right the first time – so their clients don’t have to worry about it later. When it comes to the ERTC, they will make sure that their clients are getting the maximum credit they are entitled to.
If you think your business might be eligible for the ERTC, contact Damiens Law at (601) 871-6322 or visit https://www.damienslaw.com/contact-us/ for more information.