COVID marked a time of high unemployment and constant layoffs, even for long term established businesses. For an employer to keep each employee on their payroll was extremely challenging, especially if they weren’t physically working. Fortunately, for those that managed this feat, the Employee Retention Credit applied.
This tax credit, applicable to the 2020 and 2021 tax years, saves thousands of dollars per paid employee. The pandemic caused a lot of businesses to suffer in unavoidable ways, this is one way to recuperate those costs. Qualification consists of a few key criteria. First and foremost the business must qualify their wages. The credit is based on employee payment so without that key information it cannot apply.
Second, those applying for the credit need to have suffered directly from COVID. This can come in the form of decreased revenue, shutdowns, lost suppliers, or various other setbacks. Finally the business needs to have been operating in the U.S. After a business is confirmed to meet these criteria it’s as easy as amending previous tax filings. Today it’s just 4-10 months on average before thousands to tens of thousands can be saved. Not all business qualify, but for those that do makes sure to take advantage while it’s still possible