Unlocking the Potential of Ertc Grants to Maximize Your Income
ertc grant
The Tax Cuts and Jobs Act of 2017 ushered in a new program that was meant to incentivize businesses to make one of the biggest investments, hiring new personnel and, consequently, supporting the US economy. This new program is called the Employee Retention Credit (ERC). It is a federal tax credit that rewards businesses for the money they have spent on preserving jobs; hence, helping them to maximize their income and unlock their potential.
Introducing the ERC Program
The ERC tax credit provides a full refundable tax credit that a business owner can apply for every quarter. It is applicable to both employees and independent contractors, and is equal to 50 percent of a qualified employee's wages, capped at a maximum of $10,000 for each employee per year. This means that in order to maximize income with ERC tax credits, businesses must maintain qualified wages.
ertc explained
Defining Qualified Wages
The IRS specifies that qualified wages are wages paid from March 13, 2020 through December 31, 2020; however, ERT grants have been extended to include all of 2021. Additionally, these wages must be larger than qualified health plan expenses for the period. Qualified wages do not include paid leave wages; those that qualify for the Families First Coronavirus Response Act (FFCRA); or wages for which a business can receive a Work Opportunity Tax Credit (WOTC).
Obtaining the ERC Grants
It is imperative for businesses to use the quarterly Forms 941 to claim their credit. This forms are to be filed with the IRS and can be backdated up to three quarters. But if a business has already filed its taxes for 2020, it can amend its tax return to get the credit. Moreover, a business can claim a ertc grant to get up to $50,000, regardless of the number of employees.