Employee Retention Credits: The Good News & Bad News

First, the bad news. The Employee Retention Credit (ERC) program is set to end Sept. 30, 2021. But the good news is that you still have time to take advantage of this credit, designed to help businesses keep employees on their payroll and their doors open despite the ongoing COVID-19 pandemic.

If you still aren’t sure about pursuing this tax benefit, please consider the following:

  1. ERCs are available to both charitable organizations AND for-profit businesses. Charitable entities are often excellent candidates for these credits.
  2. Entities with more than 500 employees may also qualify. This is because the 500-employee limitation is for full-time equivalent (FTE) employees, not full and part-time employees.
  3. Even if your business was considered “essential,” it may still qualify for the ERC. If your business was impacted by vendors shutting down, for example, you may still be eligible.
  4. Even if your business experienced growth during COVID-19 shutdowns, you may still qualify for the ERC. Any type of partial disruption of your business operations, including operations being limited by commerce, inability to travel, reduced hours to accommodate sanitation or restrictions of group meetings, could qualify your organization for an ERC.

Consult with a professional before you decide to avoid ERCs, or let the tax experts at SST help navigate this course with you – contact us today.