If you feel as though you are living in a far-fetched soap opera storyline, you are not alone. Although current events seem like a bad dream, the situation is quite real. As our government passes legislation to help ease the burden on small business, the waters seem to get muddier. Yet another opportunity for cash flow relief comes in the form of a payroll tax credit. The “Employee Retention Credit” may be a good option for your business.
A credit is a dollar for dollar reduction of tax liability. In this case, your payroll tax liability. One very important distinction between this credit and other forms of relief (the Paycheck Protection Program and Disaster Relief loans through the SBA) is that your business must have been suspended by government order OR gross receipts for quarter must be less than 50% of receipts for same quarter in 2019. The credit is 50% of qualifying wages (based on the average number of employees in 2019) and is limited to $10,000 in total. There are several other qualifications in this credit, and they are best explained here:
Many of these relief programs cannot be combined with each other to avoid “double dipping”. We are here to help you understand the options available and to help determine which relief opportunities are best for your organization.