Tax credit could help small businesses
TOLEDO, Ohio (WTVG) - If you run a small business hit hard financially by the pandemic, or know someone who does, there’s a tax credit to help.
It’s one that’s falling through the cracks but could be real money in pockets.
The benefit is called the Employee Retention Tax Credit.
If a company has W2 employees and either lost revenue from the pandemic or is affected by government orders on things like hours of operation or occupancy, they’d qualify for the credit for each employee.
Companies can even get it now if they also received PPP.
For 2020 employees it’s a 50% credit up to $10,000 in wages per employee. It extends through 2021 to 70% percent. So that could be $5000- $7000 per employee.
Mike Hanf from William Vaughn Accounting and Advising advised that while big businesses find all the tax credits and help, small “mom and pops” may not have the resources to find it.
“It’s just free money, right? It’s an incentive out there for the struggling companies because of the government order and the gross receipt test. It is targeting those businesses that really need the money the most,” said Hanf.
With the new stimulus deal, the program runs through 2021. Businesses may be eligible all year long.
If a company has already filed payroll tax for a prior quarter, they can file an amended return.
READ MORE ABOUT THE CREDIT FROM THE IRS:
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