The employee retention credit under the CARES Act encourages companies to keep employees on their payroll. The ERTC has been designed to encourage companies of all sizes to keep employees on their payroll during this difficult economic period. Below, companies can find important questions and answers that will help them better understand these credits and which specific companies are eligible to receive them. The Consolidated Appropriations Act provided a very welcome amendment to the CARES Act by allowing all eligible employers to apply for the ERTC, even if they have received a PPP loan.
The ERTC was originally included in the Coronavirus Aid, Relief and Economic Security Act (CARES), but was not widely used because, initially, companies could only take advantage of the Paycheck Protection Program (PPP) or the ERTC. Eligible employers can apply for the ERTC by calculating the ERTC amount for a pay period and reducing the required payroll deposit by that amount. However, some self-employed people may qualify for the ERTC if they employ other workers in their trade or business. The IRS has released new guidance for employers who have been affected by the retroactive termination of the Employee Retention Tax Credit (ERTC).
The Internal Revenue Service can also issue further guidance on the ERTC, so contact the IRS if you have any questions. ERTC funds were used to pay the salaries of eligible employees so that they could remain on staff and receive payment for their work. As mentioned above, there are companies, such as ERC Today, that can provide you with assistance in applying for the ERTC credit. Since the first tip for applying for ERTC funds is to make sure that you are an eligible company that can apply for the tax credit, it's important to understand who qualifies for the employee retention tax credit.
Eligible salaries under the ERTC for an eligible employer that is not considered a small employer are the salaries and health insurance benefits paid to an employee who is not providing services due to the effects of the pandemic. It's important to note that employers who received a PPP loan and those who receive second-draw PPP loans may also be eligible for the ERTC. If your company doesn't meet the first criteria, you can still qualify for the ERTC funding program if you can show that your company had a significant decrease in quarterly gross revenues. ERTC eligible salaries for a small employer are all salaries and health insurance benefits paid to an employee during the period in which the employer is considered an eligible employer.
The ERTC fund, also known as the employee retention tax credit, is a program created as part of the CARES Act to help employers keep their employees on the payroll. It's critical that you understand the different date ranges considered to determine if your employee's salaries are eligible for ERTC funds.