The Employee Retention Credit is a COVID era refundable tax credit. The program as a whole ended in 2021, alongside the pandemic. Many businesses, in that time, made use of the credit. It was a reward for businesses that kept their employees paid in a time where that was very challenging to do. It could save tens of thousands of dollars, even per employee.
Surprisingly though, many businesses today still qualify for the credit, and most don’t even realize. While the program itself may have ended, the funding is still available with a simple tax file amendment. Qualifying is relatively simple as well. Meeting any of four select criteria means a business may qualify.
The first is if the government suspended or limited the businesses at any point. The second is if there was a decrease in revenue specifically due to COVID. The third is if the business qualified as Recovery Startup Business in late 2021. And the fourth is if the business is an organization like a university or nonprofit.
While of course, these conditions leave out a lot of businesses, many businesses that do fit still haven’t received funding. Again, a simple tax amendment is all it takes to change this. This can be done manually, or more realistically for many businesses through a credit league or tax organization. The semantics of the program can be quite particular per employee, so having a helping hand can be quite helpful. The most important thing overall though is awareness. The funding from the program will expire, and it’s up to the businesses that do apply to take advantage.