COVID Tax Status For Employers: Natural Disaster and More

Since the outbreak of COVID-19, economies are still recovering from its effects. Many reports have suggested that the government has taken decisive action to contain and mitigate the spread of COVID and to limit the severe impacts on their economy. 

In the United States, small business forms 90% of the country's economy, and the companies are also most severely affected by Covid-19. Like every other country, the governance in the United States is also trying to help its business stay afloat and preserve its status as a functioning business. 


And once such an effort for the small business is the ERC or the Employee Retention Credit. It is one of the efforts of the government to restore its economy for its employers. 


Employee Retention Credit-Explained 


Amidst the Pandemic wave, the government introduced the CARES Act. The act introduced several programs for businesses and families to aid the effects of COVID. And one such program is the ERC. ERC aims particularly on small businesses and provides them with benefits like payroll tax relief. 


The ERC was introduced at the same time as the PPP loan. And since then, the program has been through substantial changes to make it easy for all business employers. 

The size of the business that can be considered to apply for the ERC exists between 1 to 500 W2 employees. A company with single or multiple branches must abide by the limit to apply for the business. 



The ERC Requirements: 


Other than the size limit, businesses must fall in the category of one of these three conditions to apply for the ERC. The Employee Retention Credit qualifications are as follows: 

  1. The businesses who have faced parietal or full shutdown during the year 2020 while abiding by the government rules can apply for the ERC. 

  2. Secondly, the employers or businesses who have faced a significant declination of 20% in the gross receipt can apply for the ERC. The conditions also work for the recovery startup businesses. 

  3. The third condition that employers can check against is supply chain disruption. The businesses that can help themself against these conditions are restaurants, construction companies, etc. 



What Does ERC Include For The Businesses?


Once qualified, the business can retain 70% of the qualified wages from the tax returns. Employers can count the qualified wages with respect to each of their employees. Summing up the qualifying wages, employers can consider all the wages, including the medical health insurance they have paid to their employer during all calendar quarters of 2020 and the first calendar quarter of 2021. 


The ERC mandates 7000 dollars per head for each employee to the employer after qualifying for it. So, after summing up all the wages, the employers can obtain the maximum amount of $28000. It is a non-refundable credit, meaning employers do not have to repay it and can use it as they want. 


How Can The Employer Easily Apply For The ERC?


Applying for the ERC and counting the qualifying wages can sometimes be tricky, so taking some help can ease the process a bit. ERC specialists are the best ERC contacts and consultants that can help you easily apply the ERC. All you maintain to do is to visit their website, submit the required forms, and after analyzing everything about your ERC states, they will get in touch with you. 
Location: 125 E Main St #401, American Fork, UT 84003, USA

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