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Mainstreet Insurance & Financial Services is your one-stop destination for wholesome insurance that cover all aspects of your life. We offer customized services that befit our client's needs and situations.
Employer incentives are one of the services we provide on employee retention tax credits. The most current version of the tax credit was signed into law as a result of the COVID-19 crisis with the CARES Act in 2020. It was then updated by the CAA and then again by ARPA.
The purpose of the tax credit is to keep workers on the payroll during the pandemic. The Employee Retention Tax Credit is an offset to payroll taxes, not an income tax credit. The original credit began on March 12, 2020, and its original expiration date was the end of 2020. The Consolidated Appropriations Act of 2021 extended ERC through the first half of 2021, and then the American Rescue Plan (ARPA) extended it through the end of 2021.
Key Takeaways:
1. ERC provides a refundable credit of up to $5,000 per eligible employee between March 12, 2020 - December 31, 2020
2. ERC provides a refundable credit of up to $28,000 per qualified employee between January 1, 2021 - December 31, 2021
3. You qualify if you were full or partially impacted or if your gross receipts fell below 50% for the same quarter in 2019 (for 2020) and below 80% (for 2021)
4. If you were not in business in 2019, you can use the corresponding quarters from 2020
5. You can claim your credit immediately by reducing payroll taxes sent to the IRS
6. If your credit exceeds payroll taxes, you will be refunded the difference from the IRS
7. If you received the Paycheck Protection Program (PPP) loan, you can still claim ERC for qualified wages not treated as payroll costs in obtaining forgiveness for the PPP loan
Contact Info:
Mainstreet Insurance & Financial Service
Phone: 239-732-5740
Email: info@mainstreet.com
