In recent months, there has been a lot of discussion regarding the Employee Retention Credit. The ERC is a portion of the CARES Act that gives businesses that had employees on payroll a very valuable tax credit of up to $26,000 per employee.
In most recent news, a new report from the Treasury Inspector General for Tax Administration details the IRS’s handling of the credit’s processing. Most notable takeaway: there were periods in time when the IRS halted processing of certain forms.
“The time to apply for the Employee Retention Credit is now”, says Yoni Klestzick, CEO of Employee.Credit, one of the leaders of ERC advisory firms. “The IRS has now reduced the number of 941Xs it has waiting for processing and is becoming more efficient at sending out checks to qualifying businesses. Waiting until the last minute is a bad idea.”
What makes a business eligible? There are three qualifying methods: If the business was subject to full or partial government mandated shutdown, if the business experienced a reduction in revenue, or if the business began operating on or after February 15th 2020.
What’s next for the Employee Retention Credit?
A recent bill introduced would extend the ERC into Q4 2021, which is what the initial bill was for, until it was cancelled prematurely.
That would be a welcome relief to many businesses that need additional help from the government to make up for the challenges that Covid-19 presented to their business.
How likely is that bill to pass? it is unclear at this point. “If this credit is important to your business, call your local Congressman,” says Yoni.
Only time will tell if enough traction will be generated to propel this bill forward.
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Company Name: Employee.Credit
Contact Person: Yoni Klestzick
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Country: United States
Website: https://employee.credit/