By now, most companies have heard of or even claimed Employee Retention Tax Credits (ERTC) or a PPP loan. The federal government established the Employee Retention Credit (ERC) to provide a refundable employment tax credit to help businesses with the cost of keeping staff employed. If group health care costs are your only expenses that qualify for this credit, work with a commercial tax advisor to correctly calculate and maximize your credit amount. With each passing of a new coronavirus-related bill, the rules and guidelines related to the tax credit also changed.
For ERC purposes, full-time equivalent employees are not included in the full-time employee limitation. However, if you pay employees to work and not work, the wages you pay employees for not working qualify for this credit. For a more complete view of ERC provisions, read New Legislation Brings Employee Retention Credit Updates. Eligible employers will report their total qualifying wages and related health insurance costs for each quarter on their employment tax returns (usually Form 941, Employer's Quarterly Federal Tax Return) during the applicable period.
That means that until the end of 2024, eligible employers can still take advantage of the employee withholding credit against applicable employment taxes and qualified wages paid to their employees through December. The ERTC, also known as the Employee Retention Credit (ERC), is a refundable payroll tax credit that businesses receive for qualified employee costs, including wages and certain benefits. You can find updates on the employee retention credit, frequently asked questions about mandatory paid vacation tax credits, and other information on the IRS coronavirus page. The ERC is a fully refundable tax credit for eligible employers based on payment of qualified wages and health plan expenses.
You must report your qualifying wages and related credits for each calendar quarter in which you qualify for the credit on Form 941-X, Employer's Adjusted Quarterly Federal Tax Return or Request for Reimbursement, as applicable. We can answer your questions and help you with the employer withholding tax credit, the CARES Act, tax consulting, and filing options. Fortunately, businesses still have up to three years to calculate tax credit eligibility during that period. See SHRM Online Articles House Passes Infrastructure Bill With Provisions For Workplace And After Employee Retention Credits Revocation, Next Steps It's Not Too Late To File An Application For Employee Retention Credit, So Make Sure You Don't Leave valuable money on the table for your business.
